Whitbread sees £1bn in annual losses but predicts summer bounceback

Whitbread has posted an annual loss of £1bn, but is forecasting to bounce back through strong demand for staycations this summer.

FY21 operational highlights
· Whitbread's FY21 performance reflected the significant COVID-19 restrictions that were in place for the majority of the year in both the UK and Germany
· As a result, total sales were down 71.4% year-on-year reflecting the impact of these restrictions and the closure of our hotels and restaurants for substantial periods of the year
· In the UK, Premier Inn significantly outperformed the midscale and economy hotel market since reopening in August, with customer scores also remaining very strong throughout this period, despite the significant disruption

Investing to win in FY22
· Expecting to invest over £350m of capital in this financial year
· Commercial initiatives, including the first major above-the-line Premier Inn marketing campaign for three years, are set to help both leisure and business demand recovery
· Continued disciplined investment in room refurbishments will ensure the hotels remain well-invested
· Opening 2-3,000 of pipeline rooms in the UK
· Roll-out of 'Premier Plus' rooms recommenced, delivering superior returns
· Next phase of efficiency programme launched, targeting an additional £100m of cost savings by FY24.

Operational update
· In the UK, currently over 92% of our hotels are open, and we are ready to welcome leisure guests back to our hotels from 17 May, alongside the full reopening of all of our restaurants
· Strong demand is expected for 'staycations' in UK tourist destinations throughout the summer, with business and event-led leisure demand starting to gradually recover thereafter

CEO Alison Brittain (pictured) commented, ''The last financial year was one of the most challenging in our 279 year history, as we operated under significant COVID restrictions which had many implications for our businesses, our customers and our people.

'Our business model enabled us to respond rapidly to the changing restrictions and to quickly adapt our operations as required, prioritising the health and safety of our colleagues and our customers.

'This response was possible due to the efforts of our colleagues in our hotels, restaurants and support centre, who continue to work tirelessly to maintain our very high operating standards, customer service and health and safety. I am extremely proud of, and grateful for, their incredible hard work and commitment in this most difficult year.

'Our ability to navigate through this period, with the advantages of our unique operating model, the strength of the Premier Inn brand, and our market-leading direct distribution model, has enabled us to continue to deliver strong market share gains in the UK.'

Brittain continued, 'Our exposure to the faster recovering budget sector, our resilient customer mix, and the enhanced structural opportunities that the COVID crisis has created, positions us well to continue this outperformance.

'The vaccination programme in the UK means we can look forward to the planned relaxation of Government restrictions as we move into Summer, with the first major milestone being the return of leisure guests to our hotels, and the full reopening of restaurants from 17 May. We expect a significant bounce in leisure demand in our tourist locations during the summer, followed by a gradual recovery in business and event-driven leisure demand.'

Brittain went on, 'We hold a uniquely advantaged position in the UK market as the largest operator with the strongest brand, and we will continue to invest in our estate to enhance our customer proposition. Our investment in marketing includes the first major above-the-line Premier Inn marketing campaign for three years, branded 'Rest Easy'.

'We continue to take actions to ensure that we exit the crisis as a leaner, stronger and more resilient business, including commencing the next three-year phase of our efficiency programme that will target £100m of cost savings.'

Brittain concluded, 'Combined with our financial flexibility and strong balance sheet, this gives us the ability and the confidence to invest with discipline and focus on strong long-term returns. We are well-placed to enhance our market leadership position even further in the UK, and accelerate our growth in Germany, capitalising on the enhanced structural growth opportunities that will exist and driving long-term value for all our stakeholders.'