The Premier Inn owner Whitbread has reported a £1bn annual loss as sales fell by almost three-quarters due to Covid-19 lockdowns, but the hospitality group said it expected a summer boom in travel to coastal and mountain resorts.
As the pandemic forced the closure of venues across the group, which also includes the Beefeater and Brewers Fayre pub-restaurant chains, revenues plunged 71% to £589m in what was “one of the most challenging years” in its 279-year history according to the chief executive, Alison Brittain.
The lack of business led to apretax loss of more than £1bn for the year to 25 February, compared with a £280m profit the year before. It includes a £348m charge as Whitbread was forced to write down the value of German acquisitions, property, equipment and other assets, because of the Covid-19 situation and its impact on current and future growth rates.
The UK’s biggest hotel operator said 92% of its UK hotels were open to guests staying for essential business travel while all of its restaurants remain closed for indoor dining. It expects to be able to reopen its hotels and restaurants fully from 17 May, when Covid-19 restrictions are due to be relaxed under the government’s roadmap.
Whitbread was forced to shut its hotels during the first UK coronavirus lockdown a year ago and reopened from July, followed by further closures later in the year and in early 2021 due to new lockdowns. Premier Inn hotels were more than 50% full in September and October, but that fell to 23% in January and 29% in February.
To encourage customers back, Whitbread has started a major marketing push, Rest Easy, with the voice of the comedian Sir Lenny Henry, and begun the rollout of 2,000 Premier Plus rooms this year, with faster wifi and more perks, which was paused last year.
The company is expecting a “leisure bounce” in coastal and other tourist locations, but cautioned that a full recovery would require the return of sporting events, weddings and other events. It has continued to get business from tradespeople, albeit below pre-pandemic levels, and expects to see a gradual recovery, while demand from office workers will take longer to come back. Domestic demand is expected to bounce back much quicker than international demand.
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.
“The vaccination programme in the UK means we can look forward to the planned relaxation of government restrictions as we move into summer … 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.”
The company forecast bigger losses, into 2023, in Germany, where 18 of its 30 hotels are open to essential business travel at the moment, with a further 42 branches in the pipeline.
To get through the crisis, Whitbread raised £1bn from investors in June and has cut 1,500 jobs as part of £100m in cost savings over three years.