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Premier Inn owner Whitbread has seen its annual profit rise to above pre-Covid levels as its strategy to attract more business travellers has paid off.
Whitbread made a pre-tax profit of £375 million for the financial year ending on 2 March 2023, which was a rise of 544 per cent on the previous year’s profit of £58 million. It was also a 34 per cent increase on the £280 million profit achieved by the company in the last pre-pandemic year of 2019-2020.
Revenue during the past 12 months also rose by 54 per cent year-on-year to £2.6 billion – 27 per cent above pre-Covid revenue of just over £2 billion in 2019-2020. The company said this rise was due to Premier Inn continuing to “outperform the UK midscale and economy market”.
Whitbread added that Premier Inn’s UK operation had now returned to “our well-balanced revenue mix of 50 per cent business and 50 per cent leisure”.
“UK business demand was strong, with both office-based and tradespeople volumes remaining robust throughout the year, supported by our own efforts to further improve our business proposition and relationships with travel management companies,” said the company in its results statement.
“The increase in business revenue is in part down to the investments we have made in our business proposition over the last two years. By establishing more relationships with TMCs and enhancing the appeal of our Business Account and Business Booker portal, we have increased the volume of business guests whilst also driving incremental revpar (revenue per available room) through our Business Flex rates.”
Attracting corporate travellers is also crucial for Premier Inn’s expansion into the German market with 51 hotels now open across the country.
“We see considerable opportunities for growth, both in the UK and Germany, driven by the strength of our operating model and the structural decline in the independent hotel sector,” added Whitbread.
Premier Inn plans to further improve its “business proposition” in Germany and has recruited a network of local sales managers to “build and secure relationships with corporates whilst also promoting our Business Booker and Business Account programmes”.
Whitbread’s new CEO Dominic Paul added: “Whilst the recovery in market demand in conjunction with a structural decline in the independent sector has provided a helpful backdrop, it is the combination of our own initiatives and our clearly differentiated business model that has sustained our brand strength and delivered such an impressive operational and financial performance.”
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