Downturn finally checks into Premier Inn

Parent company Whitbread’s chief executive Andy Harrison said the slowdown reflected the difference between a strong London market and the weaker regions.

Whitbread reported a 0.9 per cent fall in like-for-like sales at Premier Inn in the 11 weeks to February 16. This compares with a rise of 2.6 per cent in the previous quarter.

Whitbread said Premier Inn outperformed the overall hotels market, which fell by three per cent outside London.

Whitbread said its size and flexible pricing are helping it to win market share.

“Consumers are still under heavy financial pressure, with falling disposable incomes. We think the economy is pretty flat,” said Mr Harrison.

The company, which also owns Costa Coffee shops and the Beefeater and Brewers Fayre pub restaurant chains, said total sales rose 10.1 per cent over the 11-week period, with like-for-like sales growth slowing to 1.8 per cent from 2.4 per cent in the previous quarter. Costa Coffee put in a robust performance, with like-for-like sales rising 6.2 per cent, as customers gave themselves affordable treats.

Whitbread’s restaurants division returned to like-for-like sales growth after it came up against weaker comparisons with the previous Christmas, which was hit by Arctic weather.

Premier Inn has previously performed strongly through the downturn, benefiting from business customers trading down from four and five star hotels and a £29 per room offer for leisure customers.

Mr Harrison said that with 10,000 rooms in its committed pipeline the company is on track to have 65,000 rooms by 2016, raising its market share to 10 per cent from seven per cent.