Budget hotel chain Premier Inn has recorded a recovery in revenue and plans to grow by a third by 2014.
Parent company Whitbread, announcing underlying half year pre-tax profits up by 28% to almost £152 million for the period to September 30, said like-for-like occupancy at Premier Inn improved 9.2 percentage points to 79.3%.
Premier Inn sales rose by 14%, driven by a combination of increased volumes and new properties.
“This demonstrates good recovery and is nearing our 80% occupancy target, although the last quarter of the financial year tends to be seasonally weaker and will pull the full year average down,” said Whitbread, which also runs Costa coffee shops.
The chain has a “volume-led strategy” to bring occupancy back up to 80% based on four key levers – increased advertising, dynamic pricing, widening booking distribution and increased sales activity.
Whitbread chief executive Alan Parker said: “Having so far weathered the current challenging economic conditions, we are now well placed, with clear and deliverable organic growth plans, to increase the rate of new openings.
“In the first half, Premier Inn opened 795 rooms and in the second half of the year we plan to open at least 1,700 new rooms in up to 18 hotels, eight of which are expected to be on joint sites with a Whitbread restaurant.
“As previously announced in September, 633 rooms will leave the estate following our decision to exit our 10-year management agreement on 14 hotels run by Roadchef plus one run by Moto. These sites are not a strong strategic fit for the Premier Inn brand.
“Our total UK portfolio will comprise over 43,000 rooms across more than 590 hotels by the end of the year.”
The chain plans to open at least 3,500 rooms and grow the current estate by around one third to 55,000 UK rooms by the end of 2013/14.
Parker, delivering his last set of results before handing over to ex-EasyJet chief Andy Harrison who takes over as Whitbread chief executive next month, added: “Whitbread has performed strongly in both good times and during the recession and is well placed to grow in the current environment. While the economic outlook remains uncertain, we are confident in the outturn for the year.”
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