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Cost-conscious consumers might have helped UK-based hotel chain Premier Inn beat performance expectations. Still, the company seems set to find added measures to add value for its shareholders with a potential share buyback program.
Premier Inn owner Whitbread Plc on Tuesday reported its annual profit above pre-pandemic levels, beating expectations, buoyed by strong demand for accommodation and leisure travel in the wake of holiday periods devoid of Covid-19 restrictions.
Budget hotel chains and airlines have seen robust demand as consumers restrict spending on the back of a deepening cost-of-living squeeze. Hopes that Whitbread’s key markets – the UK and Germany – could avoid recession also boosted business prospects for the London-listed firm.
The company said strong trading has continued into the new financial year, with its UK accommodation sales up 17 percent in the seven weeks ended April 20 from the year-ago period.
The hotel chain also floated plans to launch a share buyback program of up to $374.4 million.
The company, which also owns steakhouses Beefeater and Bar+Block, reported adjusted profit before tax of $514 million for the 52-week period ended March 2, compared with average analysts’ estimate of $472 million, according to Refinitiv Eikon data.
(Reporting by Aby Jose Koilparambil and Radhika Anilkumar in Bengaluru; Editing by Sherry Jacob-Phillips)
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Tags: budget hotels, hotel earnings, lodging, premier inn, whitbread
Photo credit: Signage of a Premier Inn Hotel is seen in Liverpool City Centre. Source: Reuters