Sales at the UK’s largest budget hotel chain were almost 5% down in the first quarter of the financial year.
Premier Inn parent company Whitbread cited continuing weaker business and leisure confidence.
This was coinciding with ongoing political and economic uncertainty in the UK, the company warned.
“This has impacted domestic hotel demand, particularly in the regional business market, where most Premier Inn hotels are located.
“It is difficult to predict how business confidence and business investment will evolve over the year, however, we continue to monitor its impact on the market closely and will provide an update at our first-half results in October.”
UK room sales were down 1.5% in the three months due to weak market conditions and down 4.6% on a like-for-like basis.
“This was predominantly due to declining business confidence, impacting short-lead bookings,” the company said. “During the quarter 282 new rooms were added in the UK, with 3,000 to 3,500 rooms expected to be added during the financial year.
“Although forward bookings look positive, caution remains on the UK hotel environment given ongoing political uncertainty and the impact this has on business confidence.”
Whitbread CEO Alison Brittain said: “Whilst we are cautious about short-term market conditions, we are confident in our plans given the significant growth opportunities in the UK and internationally.
“Given our strong balance sheet, efficiency programme and robust business model, we are in a strong position and we will continue to invest in order to maintain Premier Inn’s competitive advantages and to capitalise on our structural growth opportunities.”
She described expansion into Germany as being “firmly on target” with a new hotel in Hamburg performing above expectations and a property in Frankfurt performing well. Two others are to open this year.
The acquisition of 19 Foremost Hospitality hotels in the country will see 13 being rebranded as Premier Inns in the first half of next year
“We have delivered a resilient performance in the first quarter despite more challenging market conditions and we continue to make good progress with our efficiency programme, which is helping to partially offset another year of high industry cost inflation,” Brittain said.