Direct digital distribution powers Premier Inn growth

The UK’s largest budget hotel chain, Premier Inn, increased direct digital distribution (sales on its own website) to 86% in the 2015-16 financial year.

This compares to a rate of 69% in 2011-12, parent company Whitbread disclosed today while announcing an 11.3% rise in annual operating profits for its hotels and restaurants division to £446.9 million for the year to March 3.

Premier Inn saw sales growth of 12.9% as Whitbread’s total revenue increased by 12% to £2.9 billion to give an overall profit up 5.8% to £387.3 million. Total occupancy reached 80.9%.

Whitbread chief executive Alison Brittain said: “The benefit of offering a consistent quality room and value for money, combined with a good website, has enabled us to grow our direct digital distribution from 69% in 2011/12 to 86% in 2015/16. 

“Through this we are able to provide a better service to our customers, offering them the lowest price channel along with the most comprehensive information regarding their stay. 

“At the same time we benefit from a low-cost booking channel and receiving greater customer insight.”

A total of 40 new hotels were opened in the 12 months to take the total UK portfolio up to 737, around 20 more than its nearest rival.

Premier Inn is making “good progress” towards a target of increasing its room stock from 65,000 rooms to around 85,000 rooms by 2020. It has a current pipeline of 12,700 rooms after opening a record of 5,461 rooms in the past 12 months.

The brand’s ‘hub by Premier Inn’ new compact city centre hotel concept now comprises four properties in London and Edinburgh.

“It allows us to grow profitably in city centre locations with high property costs and to deliver a good return on capital, whilst offering customers great value, high quality rooms in great locations,” Brittain said.
“The regional hotel market also continues to offer good growth opportunities, through both existing and new catchment areas. 

“Our unique freehold backing provides us with a significant opportunity from our low risk, good returning hotel extensions programme, which represents some 39% of our future regional growth.”

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