Whitbread reiterates outlook on strong accommodation sales

(Sharecast News) - Hospitality group Whitbread reiterated its full-year outlook on Tuesday, after solid demand for hotel stays during the third quarter helped offset weaker food and drink sales. The blue chip owner of Premier Inn and Brewers Fayre, among others, posted a 2% increase in group sales in the 13 weeks to 27 November, to £781m, or 3% on a like-for-like basis.

Within that, accommodation sales sparked 4% - supported by a 16% jump in revenues in Germany - while food and beverage fell 3%.

On a like-for-like basis, group sales rose 3%, on the back of flat food and beverage sales and a 3% spark in accommodation.

Coupled with current trading in line with expectations and improved cost efficiencies, Whitbread said it remained "confident" in its full-year outlook.

The group now expects to deliver cost efficiencies of between £75m and £80m this year across labour, technology and procurement, up from previous guidance for between £65m and £70m.

Dominic Paul, chief executive, said there had been "positive momentum" throughout the business during the quarter.

He continued: "We remain highly disciplined regarding our strategic actions and by focusing on what we can control, we have continued to make great progress against our key initiatives and will deliver a higher level of efficiencies than previously expected.

"In the UK, the overall market continued its return to growth."

Looking to the 2027 full-year, Whitbread noted that it now expects the cost impact from the proposed change in business rates to be around £35m, lower than its initial estimate for between £40m and £50m.

However, Paul noted: "We continue to believe the proposed changes to business rates are damaging for the overall sector and will impact future investment and job creation and we, along with the wider hospitality industry, continue to press the UK government for changes."