Whitbread sees Omicron hit to festive trading and cost surge

Premier Inn owner Whitbread has revealed a knock to demand over the festive season from the spread of the Omicron variant and cautioned over rising costs.

The group saw total UK sales drop 4.4% compared with two years ago in the six weeks to January 6, dragged lower by a 17.2% slump in food and drink revenues due to fears over the variant and restrictions on eating out in Scotland Wales and Northern Ireland.

Lockdown measures in Germany have also taken their toll on its chain in the country, with hotel occupancy levels plunging 36% over the six weeks.

Whitbread said it was too early to tell the impact of the Omicron hit to trade over the full year, with January and February already traditionally the quietest months for the group.

Whilst our hotel performance was excellent, the value pub and restaurant sector in which we operate remains more challenging

Alison Brittain, chief executive of Whitbread

It said it still hopes Premier Inn hotel trading will recover to pre-Covid levels this year, despite the current woes.

The firm also revealed it had delayed about £20 million of investment and marketing project spend this year due to supply chain and trading challenges, while it warned the group’s cost inflation is set to hit up to 8% on average.

Around £1.4 billion of its cost base is set to be affected by the price hikes, but the firm said it hopes to “largely” offset the pressures, including by existing cost saving measures.

Alison Brittain, chief executive of Whitbread, said: “UK accommodation sales remained resilient in December, albeit softening as we moved through the month and into the festive period as a result of the onset of the Omicron Covid-19 variant.

“Whilst our hotel performance was excellent, the value pub and restaurant sector in which we operate remains more challenging.”

Figures also released for the third quarter to November 25 showed more resilient trading before Omicron struck, with total like-for-like UK sales down 1%.

It said accommodation sales rose 5.5%, while food and drink sales were down 13.4% in the quarter.

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