Whitbread, the parent company of Premier Inn, has announced plans for an “accelerating growth plan” for the budget hotel group in the UK and Germany. This includes converting 112 underperforming restaurants into new Premier Inn hotels, adding 3,500 rooms to the network. Premier Inn currently has about 77,000 hotel rooms in the UK and aims to increase this number by 25% by mid-2029, with a long-term goal of reaching 125,000 rooms. The CEO, Dominic Paul, sees a significant opportunity for further growth and is optimistic about the future of the brand.
In the UK, Premier Inn reported a 36% increase in pre-tax profit to approximately $700 million (£561 million) for the fiscal year through February 29, 2024. Revenue per available room was also up by 10% compared to the previous year, which was attributed to strong direct booking business and software that matches rates to demand. The UK hotel business achieved its highest-ever level of return on capital at 15.5%. In Germany, Whitbread added over 1,400 rooms and reduced losses, with executives recognizing the sizeable long-term opportunity in the German market.
To support its growth plans, the company aims to cut nearly $200 million (£150 million) in costs over the next few years. This financial strategy is part of the broader goal of expanding the Premier Inn brand in both the UK and Germany. The company’s focus on cost efficiency and strategic growth initiatives is expected to drive profits and increase market share in both markets. With the significant growth potential identified by executives, Premier Inn is well-positioned to continue its success and capitalize on opportunities in the budget hotel segment.
The accommodations sector stock index performance year-to-date for the Skift Travel 200 (ST200) includes a range of companies publicly traded across global markets, from international hotel brands and hotel REITs to alternative accommodations and timeshares. This index provides insight into the financial performance of nearly 200 travel companies worth over a trillion dollars combined, offering a comprehensive view of the accommodations sector. The strong performance of hotels and short-term rental sector stocks within the ST200 reflects the overall health of the industry and the positive outlook for companies like Premier Inn.
Overall, Premier Inn’s growth plans and financial results demonstrate the brand’s resilience and strength in the competitive budget hotel market. With a focus on expanding its presence in the UK and Germany, the company is strategically positioned to capitalize on market opportunities and drive long-term profitability. By leveraging its strong direct booking business, innovative software solutions, and cost-cutting initiatives, Premier Inn is well-equipped to achieve its growth targets and continue delivering value to customers. With a commitment to enhancing the guest experience through comfortable accommodations and a “good sleep” guarantee, Premier Inn is poised for continued success in the years ahead.
