Premier Inn-owner Whitbread expects a “significant bounce” in holiday demand as Covid travel restrictions are relaxed from next month.

The forecast came as the company reported a 71.4% slump in sales last year and a loss of £1 billion, down from a profit of £280 million in the previous 12 months.

More than 92% of the group’s UK budget hotels in the UK are open, “and we are ready to welcome leisure guests back to our hotels from 17 May, alongside the full reopening of all of our restaurants.”

The company added: “Strong demand is expected for ‘staycations’ in UK tourist destinations throughout the summer, with business and event-led leisure demand starting to gradually recover thereafter.”

Chief executive Alison Brittain said: “The last financial year was one of the most challenging in our 279 year history, as we operated under significant Covid restrictions which had many implications for our businesses, our customers and our people.”

However, she added: “The vaccination programme in the UK means we can look forward to the planned relaxation of government restrictions as we move into summer, with the first major milestone being the return of leisure guests to our hotels, and the full reopening of restaurants from 17 May.

“We expect a significant bounce in leisure demand in our tourist locations during the summer, followed by a gradual recovery in business and event-driven leisure demand.”

Commenting on the results, Julie Palmer, partner and restructuring expert at Begbies Traynor, said: “The latest Whitbread results will come as little surprise given the industry’s forced closures over the course of the past year. However, all eyes will not necessarily be on its results, but its plan for the future, both immediate as restrictions ease, and longer-term as the shape of the economy changes and temporary changes due to the pandemic become more permanent.

“Adaptation of outdoor space as al fresco dining becomes the theme of spring and summer will be key for Whitbread’s hospitality venues, but it will also be looking to benefit from a summer of staycations as holidaymakers show a reluctance to travel abroad.

“It will have to promote the safety of its Premier Inn venues while the weather is good and restrictions are eased.

“This could be key to recouping some of its losses and the cash reserves it has burned through in the last 12 months. It will also help that it has announced a net zero target to reach.

“After having been able to report positive results and sell its profitable Costa arm to focus on hotels in previous years Whitbread, like so many others in this industry, has been rocked by the pandemic.

“It can get back on its feet again, but the Whitbread we saw before the pandemic could be different to the one we see after it. Even after all restrictions are removed change is coming.”