18 October 2023
If you are covering Whitbread’s latest financial results, please find below a comment from Mamta Valechha, equity research analyst at Quilter Cheviot:
“Whitbread reported a good set of Q2 numbers this morning, coming in ahead of expectations. Against the backdrop of strong demand, but weak supply of budget hotels and significant reduction in the number of independent hotels, Premier Inn continues to perform well in the UK. London was particularly strong, boosted both by domestic and international inbound demand, as well as an increase in office-based business travel.
“Encouragingly, Premier Inn UK sustained it outperformance against the broader midscale and economy sector, reflecting the group’s scale and strong brand, allowing it to weather the cost of living crisis better than others.
“Most recent trading remains strong in the UK, with total accommodation sales up 13% for the last six weeks and booked volumes are stable year on year, but crucially it is able to pass on price increases without consequences on demand.
“Whitbread’s food and beverage sales also improved, especially at those restaurants which are integrated within a hotel, driven by both spend per head and table bookings.
“Whitbread is delivering strong results due to that favourable supply backdrop and this is reflected in the fact it has increased its dividend and announced a further £300m capital return. With household budgets still constrained, Whitbread has a good opportunity to take advantage of the ongoing supply contraction of independent hotels in the UK.”
