If you’ve walked through any major city in the UK, chances are you’ve passed a Premier Inn. If owner Whitbread has its way, you’ll be seeing a lot more of them – and in places you might not expect.
Last week the company struck a deal with Lambeth Council to convert Phoenix House, its former 10-storey office in London’s Vauxhall, into a Premier Inn. Whitbread has taken a 30-year lease on the property. The company said it has been hunting for the right property to redevelop in Vauxhall for almost a decade.
The deal comes as Whitbread continues with an aggressive expansion spree, planning to add thousands of rooms to an already sprawling portfolio. Alex Flach, development director at Whitbread, told Estates Gazette in an exclusive interview that the company has some 7,500 new rooms in the pipeline as part of plans to scale to 98,000 rooms in total. And as the Vauxhall project shows, this isn’t just about building new hotels – it’s about smart acquisitions, bold conversions and staying ahead in a rapidly changing hotel market.
Expansion spree
While new-builds are still a core part of the business, Whitbread is capitalising on the changing property landscape by snapping up underutilised spaces, repurposing them and building profitable Premier Inns. From police stations to car parks and offices, Whitbread is on a mission to turn unconventional spaces into thriving hotels.
Where the office market struggles, Whitbread sees opportunity. With rising construction costs and shifts in the commercial property market, converting office spaces into hotels makes sense for the company.
“We’re doing a lot of office purchases,” Flach said. “We bought a site in Holborn, Capital House in Edinburgh, and one in [London’s] Fenchurch Street right next to the station. We’re going through planning at the moment to get change of use.”
Earlier this month, Whitbread acquired Churchill House, located at 35 Red Lion Square in Holborn, WC1, from the Royal College of Anaesthetists, with plans to convert it into a 150-bedroom Premier Inn Hub hotel.
Why offices? Unlike modern workplaces, which can require high ceilings and extensive infrastructure, hotels can be built with lower ceiling heights and simpler layouts. “Low ceiling heights suits hotel conversion,” Flach said. “We can build in all the sustainability side of things.”
However, one challenge with office conversions is acoustics, particularly in cities such as London, noise from where Underground trains can affect sleep.
“We can strip back – we don’t need the headroom that modern offices do,” Flach said. “Our problems are usually acoustics… any noise from the Tubes running would disturb people’s sleep. So we spend a lot of time working on that.
“We’ve learnt a lot about how to construct hotel rooms completely independently of the structure to avoid vibration and noise issues. Ultimately, we sell sleep, and if we can’t guarantee that, then we won’t do it.”
Accelerated growth
Whitbread’s expansion strategy isn’t limited to offices. The company still owns around 400 restaurants, and it’s reviewing whether some of those spaces would be more profitable as hotel rooms.
Under its accelerated growth plan, Whitbread is converting 112 branded restaurants into 3,500 new rooms. Moreover, the company is exiting 126 further restaurants and replacing them with integrated F&B offer for guests. It had accepted offers on 51 sites for £56m as of October 2024
The question when it comes to restaurants is, “Can we make more money out of turning them into hotel rooms?”, Flach said.
“That’s either changing internally, putting in hotel rooms, or knocking them down and then building a block of hotel rooms.”
The company is also eyeing unconventional spaces. For example, Birmingham’s Snow Hill, an old police station, is being converted into a hotel. “We’re on site at the moment in Snow Hill,” Flach said. “It’s an old police station/office, and we’re doing part conversion and part new extension to it.”
Another innovative project is transforming the Brunswick Centre underground car park in Bloomsbury, WC1, into a 200-bedroom Premier Inn Hub hotel.
“We’ve agreed a deal with the landlord to take the basement car park,” Flach said. “It will be one level below ground, with artificial lighting that mirrors natural daylight. The guest experience will feel just like any other Premier Inn.”
This approach of converting underutilised spaces allows Whitbread to maximise existing assets rather than relying solely on new development. Given the challenges of acquiring new land in prime locations, repurposing spaces the company already owns is a move that fuels its expansion at a lower cost.
Buyer’s market
Unlike developers struggling with post-Covid construction costs and rising interest rates, Whitbread has a financial edge. “Whitbread as a business is cash-rich. This time last year [there] was £1bn in the bank,” Flach said.
Whitbread has traditionally relied on leasehold sites, but in recent years, the company has upped its freehold acquisitions.
“Pre-Covid, if we bought 15 sites, 14 of them would be leasehold,” Flach said. “Post-Covid, of 15 sites, we were probably buying 14 freeholds and one or two leaseholds. This year, is the first time it’s been about 50-50.”
As of 2025, Whitbread’s UK estate is 57% freehold and 43% leasehold. Rising construction costs and interest rates have made it harder for developers to turn a profit, pushing Whitbread to take on more projects itself.
“Developers are starting to see more cost certainty, construction costs are levelling out,” Flach said. “But in the past two or three years, we’ve been buying a lot of freehold, especially in London.”
One of Whitbread’s most high-profile recent acquisitions is 5 Strand, WC2, where a £200m Premier Inn is being developed. The site was once Landsec’s headquarters.
“We have demolished the site now. We are ready to go and start building it,” Flach said. “That will be three years on site.”
Staying ahead with tech
Whitbread is also focused on using AI and technology to stay ahead of competitors. “Most of our hotels now have kiosk check-in, which means our staff can focus on personal service rather than administration,” Flach said. “Ultimately, that will go to your phone – you will be able to check-in and get into your room via your phone.”
AI is also making the booking process smarter. The company has a system that can track trends and start adjusting prices in real time.
Flach boils down Premier Inn’s success to three things: consistency, people and financial stability.
“When you come into a Premier Inn, more than anything, it’s the welcome you get from our staff,” he said. “I don’t know how we do it. If you could bottle it and sell it, we would make a lot of money.”
Premier Inn’s ability to maintain a consistent guest experience across hundreds of locations is a reason for its success, Flach said. And Whitbread’s ownership model has provided stability, he added. “Because we own half of our estate, Covid was a problem – we lost a billion quid one year. But we were big enough and well-funded enough to shrug it off and carry on building.”
While the UK remains the primary focus, Whitbread sees significant potential in overseas markets, particularly in regions with growing demand for budget accommodations.
“We’re into Germany, we’re into the Middle East, we have opened our first in Vienna,” Flach said. “I think we will go further into Europe, looking at other Middle Eastern countries as well.”
Image © Whitbread
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