All nineteen Premier Inns in Germany that were shut during its lockdown period have also reopened, the FTSE 100-listed group said in a first-quarter trading update. Restaurants and pubs in England and Wales could resume trading from last Saturday with adherence to social distancing rules.
Alison Brittain, Whitbread’s chief executive, said that while still very early, the trends were for good demand for summer accommodation in traditional regional tourist destinations, while the rest of the regions and metropolitan areas, including London, remain subdued.
Brittain noted that Whitbread had operated 39 hotels for essential workers during the lockdown period and this had given it crucial experience in how to operate under the new rules.
The group also strengthened its financial position during the period with a £1bn right issue in June.
Revenues in the three months to end May fell by 79.4%, which reflected the fact that the vast majority of the group’s UK and German estate were closed from the end of March, Whitbread said.
In morning trade, Whitbread shares were 4.5% lower at 2,330p.
Scary, but expected numbers
Commenting on the update, Emilie Stevens, equity analyst at Hargreaves Lansdown said: “Today’s results read, ‘closed over lockdown’. So while the headline declines are scary, they were to be expected. Importantly hotels and restaurants are starting to reopen with most expected to be open by the end of July. Whitbread’s confident it’s got a socially distanced hoteling model sorted, having already used its hotels to house key workers over the lockdown.
“With the foreign holiday market still rebooting it looks like UK staycations could be the main holiday choice this summer, which is good news for Whitbread’s regional locations. Before the pandemic London hotels were the boost and regional destinations the drag. But early booking data shows that regional tourist locations are seeing good demand while London remains subdued. Unfortunately, while higher levels of domestic tourism is good news, particularly if it’s a trend that holds, it’s no substitute for international and businesses travellers visiting the UK’s major cities. For now though it’s a welcome break in an unfriendly market environment.”
She added: “Whitbread confirmed it has the finances to last a long period of low revenue, which is important given that the world Premier Inn’s are reopening too remains unclear. It was also keen to point out however, the extra flexibility granted by its £1bn rights issue in June. Whitbread grew market share over the crisis in 2008 and with plans to increase its portfolio to 170,000 rooms from c.80,000 today, we could see the group take advantage of others troubles in the coming months.”
— Adds share price, analyst comment —
Published at Tue, 07 Jul 2020 09:40:00 +0000-Whitbread sees good tourist demand as hotels and restaurants reopen