Whitbread hails leisure demand for boosting Premier Inn chain

The leisure group, which also owns Beefeater and Brewers Fayre restaurants and the coffee chain Costa, claimed a significant increase in Premier's market share after like-for-like sales rose 10.5 per cent in the 13 weeks to June 3.

It said the chain's outperformance was driven by increased marketing, including an advertising campaign fronted by comedian Lenny Henry, and the impact of "dynamic pricing" where rooms are priced according to demand.

In a competitive marketplace, rival Travelodge recently launched its own advertising campaign featuring soft toys Mr Sleep and the Zzz Squad.

Premier said rooms costing from 29 for leisure guests had generated a significant increase in weekend occupancy, while business account sales revenue grew 21 per cent to more than 50m. Whitbread's pub restaurants, which are often situated alongside its Premier Inn hotels, grew like-for-like sales by 3.6 per cent in the same period. The company added that its Costa business delivered "another outstanding performance", with like-for-like sales up by 8.5 per cent.

Whitbread shares jumped following the stronger than expected start to the company's new financial year.

Chief executive Alan Parker said: "Last year, we acted promptly to increase market share, reduce costs and conserve cash. The positive momentum generated by these decisive actions has continued into 2010/11."

Whitbread said Premier Inn opened four new hotels with a total of 380 rooms in the quarter, part of 2,500 new rooms due to open in the financial year.

Mr Parker, who is due to retire in November after 18 years with the firm, said longer term expansion will continue at a "pace appropriate to our competitive performance and growth in the market".

While like-for-like sales across the group were 7.6 per cent higher in the quarter, analysts said it was too early in the year to revise profits guidance.

EasyJet chief executive and former RAC boss Andy Harrison is to be the successor to Mr Parker.