Whitbread boosted by strong Premier Inn sales

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Shares in Whitbread were up 3.75 percent to 1,162 pence at 9:01 a.m. on Thursday, having outperformed the FTSE All Share Travel and Leisure Index by 2 percent since the start of the year.

The company reported group like-for-like sales growth of 7 percent in the 24 weeks to August 14, above analysts' forecasts of a 4-5 percent increase.

Whitbread said its Premier Inn budget hotel chain, which accounts for about 70 percent of profits, had outperformed the wider hotel market, with total sales up 17.9 percent and like-for-like sales up 10.2 percent.

The growth was driven by 7.6 percent more rooms being sold across Premier Inn's expanded estate, and revenue per available room (RevPAR) increasing 5.8 percent.

Premier Inn has been picking up trade as cash-strapped Britons look for better deals on hotels and businesses cut spending. Whitbread said strong demand had been maintained in the commercial market, with corporate buyers attracted by Premier Inn's value-for-money price and facilities.

Chief Executive Alan Parker told reporters that sales derived from Premier Inn's Business Account scheme increased by 36 percent during the period.

"Over the last six months, we've seen increasing strength in the business market particularly from corporate buyers as large customers recognise that they've got to save money on travel," Parker said on a conference call.

RESTAURANTS, COSTA COFFEE GAIN

Parker said corporate customers now account for about 60 percent of Premier Inn's revenues. The customer mix is roughly 50:50 but Parker said corporate customers generally stay longer and spend more money.

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