Recovery in regional UK hotel market boosts Premier Inn

Fourth quarter sales at Premier Inn rose by 16.5% on the back of expansion during 2014.

Parent company Whitbread said the budget chain saw total revenue per available room (revpar) grow by 8.9% in the three months with occupancy up by three percentage points to 71.1%.

Premier Inn achieved record occupancy in 2014 of 81.3%, up 3.3 points on 2013 as capacity increased by 6%.

Total sales grew by 15.2% in the 50 weeks to February 12, with almost 24% growth in London in the last quarter and 14.6% in the regions.

Almost 4,500 new rooms are due to open this year including the first hub by Premier Inn property and a further 5,500 in 2015-16. The company has a pipeline of 12,816 rooms.

Andy Harrison, chief executive of Whitbread, which also runs the Costa coffee shop chain and restaurants, said Premier Inn had benefited from the recovery in the UK regional hotel market.

He said:  “We are investing to improve our customer propositions even further and in our ambitious organic network expansion.

“This year we shall open close to 4,500 new UK rooms and c.230 net new Costa stores worldwide, with a further 5,500 new UK rooms and 250 net new Costa stores worldwide planned for the next financial year.

“We expect our capital investment for this year to be £575 million, growing to c.£700 million next year as we open more hotel rooms and invest in our freehold pipeline, particularly in London.

“This organic network growth and our strong return on capital should continue to create substantial shareholder value.”

Whitbread’s annual results for the year to February 26 are due to be released on April 28.

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