The closure of hotels from March as the Covid-19 pandemic struck sent Premier Inn owner Whitbread into a half-year pre-tax loss of almost £745 million.
The “vast majority” of the budgte hotel company’s business was forced to close until May in Germany and between July and August in the UK.
Revenue during the closure period dropped by 99% over the same time last year when a first-half profit of £220 million was reported.
Whitbread embarked on a £1 billion rights issue in June in addition to £600 million obtained through the government’s Covid Corporate Financing Facility and £950 million in revolving credit.
Chief executive Alison Brittain said: “The impact of the Covid pandemic on the hotel sector will undoubtedly be significant and we are already seeing signs of distress and constraint in the competitive landscape.
“This is likely to accelerate the structural changes in the market with supply contraction and constrained investment amongst independent and budget branded operators in both the UK and Germany.”
She added: “Throughout the crisis we have taken decisive action and we continue to focus on protecting our guests, our teams and our business in light of the impact of the recent increase in regional and national restrictions.
“We are also improving the flexibility of our cost model to respond to changes in demand.
“As a result, we enter this second-wave period in a position of strength, with our customer scores higher than they have ever been, our market share growing in the UK and extending a meaningful network of hotels in Germany, giving us the opportunity to achieve national brand awareness and operate at scale.”
She described Whitbread’s long-term strategy as remaining “as relevant and compelling as ever”.
Brittain said: “Our performance following the reopening of our hotels and restaurants in the summer was encouraging and we continue to trade ahead of the market.
“Taking market share in the UK demonstrates the strength of our trusted Premier Inn brand and the benefits of our unique operating model.
“We hold a uniquely advantaged position in the UK market as the largest player with the strongest brand.
“Our financial flexibility and resilience, combined with a strong balance sheet, give us the ability and the confidence to invest with discipline and focus on strong long-term returns.
“We will be well placed to enhance our market leadership position even further in the UK, and accelerate our growth in Germany, supporting our guests and teams and driving long-term value for all our stakeholders.”
The hotel network in Germany has been trebled since March to 21 properties.
The company today announced the acquisition of up to 15 more hotels in thr country to take the portfolio of open and pipeline hotels to nearly 70, with “broad geographic coverage” across many major cities and towns.