Skift Take

Coronavirus has masked the true impact of Brexit on the UK hospitality industry. Expect more hotels to bemoan the situation as they attempt to recover from the pandemic.

Premier Inn owner Whitbread on Tuesday reported a smaller half-year loss and predicted a full recovery at its UK hotels in 2022, but warned of labour shortages across the industry as it set aside tens of millions of pounds to attract new hires.

The company, which has 30,000 staff in 1,200 its hotels and restaurants across Britain, said it plans to spend about 23 million pounds ($31.63 million) on salary increases and one-off bonuses as it deals with a “material number of vacancies”.

Staff shortages due to the health crisis are widespread but Britain is also dealing with the fallout from Brexit, which has significantly reduced EU workers across a range of industries from poultry to the haulage sector.

“Overall within the industry there is a shortage of people who are available for work, particularly experienced people where the training load is less,” Chief Executive Alison Brittain told a media call.

“I think it (labour shortages) is a combination of a number of factors that have all come together at the same time … We just have to work out over a little period of time whether it is a structural issue or a temporary issue.”

The company said high occupancy levels at its hotels combined with the market-wide supply chain issues and tighter labour supply, especially in tourist locations and London, had created a challenging operating environment.

The owner of steakhouses Beefeater and Bar+Block reported a narrowing in its adjusted pretax loss to 56.6 million pounds for the six months ended Aug. 26 from 367.4 million pounds a year earlier.

Shares in Whitbread, which is now seeing pre-Covid levels of demand in some regions, were up 3% on the FTSE 100 blue-chip index by 0825 GMT.

The company said revPAR – a key performance indicator for hotel operators – on a like-for-like basis in the UK could potentially reach full recovery at some point in 2022.

“The pandemic has likely seen smaller operators forced to close, creating a gap into which Whitbread can expand in the UK,” Hargreaves analyst Nicholas Hyett said.

($1 = 0.7272 pounds)

(Reporting by Muvija M and Chris Peters in Bengaluru; editing by Uttaresh.V and Jane Merriman)

This article was written by Muvija M and Chris Peters from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

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Tags: earnings, labor, premier inn

Photo credit: Hub by Premier Inn, one of Whitbread's new hospitality brands. The company predicts a strong 2022 if labor situations can improve. Whitbread

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