The owner of budget chain Premier Inn today reported strong forward demand after delivering a 44% rise in first half pre-tax profits to £391 million.
Whitbread described the year-on-year result as being ahead of expectations with UK hotel sales up by 15% “driven by our strong brand, clear strategy and powerful business model”.
The company said: “We remain optimistic about the outlook; leisure and business demand remains strong as evidenced by our forward booked position; favourable supply dynamics are set to continue for some time with the continued decline of independent hotels and constrained UK room supply growth.
“UK hotel demand is strong and with supply not now expected to return to pre-pandemic levels for at least five years.
“We are therefore seeking opportunities to grow our pipeline towards our long-term potential of 125,000 rooms across the UK and Ireland, whilst continuing to maintain our financial discipline.”
Whitbread added that recent trends are continuing with the forward booked revenue position ahead of last year.
Chief executive Dominic Paul said: “This is an impressive first half performance. In the UK, we maintained high levels of occupancy whilst continuing to attract excellent guest scores and offering great value for our customers.
“The strengths of our operating model and our continued focus on driving cost efficiencies across the business resulted in UK margins exceeding pre-pandemic levels.
“In Germany, we are making good progress and are continuing to refine our strategy based on our learnings to-date and whilst there is much work to do as we continue to grow, we remain on course to achieve our long-term ambition of 10%-14% return on capital.
“We are generating significant operating cash flow that we are redeploying into future profit growth as well as returning value to shareholders through increased dividends and share buy-backs.
“Given the structural shift in hotel supply and by continuing to invest in our assets, our brand and our teams, we remain confident that we can both extend our market leading position in the UK and replicate that success in Germany.”
He added: ”The group is in excellent shape, trading well and has significant growth potential, both in the UK and Germany.
“Based on our strong performance to-date and an encouraging forward booked position, we remain optimistic about the full year outlook and look forward with confidence as reflected by our increased interim dividend and further planned share buy-back.”