Profits of Premier Inn's parent company decrease due to closure of restaurants
Premier Inn's Parent Company Struggles, Plans Expansion:
UK hospitality giant Whitbread, known for its iconic Premier Inn hotels and restaurant brands like Beefeater and Brewers Fayre, faced a rough year with profits plummeting 19%. In the 52 weeks ending February 27, 2025, the company managed to scrape together £368 million, down from £453 million the previous year [Reference 1].
The dive in profits emerged due to a weaker sales market, which was partly because of restaurant closures. Overall turnover also took a hit, dipping by 1% to £2.9 billion, resulting from a 11% plunge in food and beverage sales [Reference 1].
Despite the dramatic fall, Whitbread has a long-term vision. As part of a growth strategy launched last year, the company plans to invest £500 million in expanding their hotel room count by 3,500, reaching a target of 98,000 rooms [Reference 2].
Remarkably, Premier Inn managed to outperform its competitors in the midscale and economy market on a revenue per available room basis [Reference 1]. The firm sees itself set to achieve incremental adjusted pre-tax profits of at least £300 million by 2030, fitting in with its five-year plan [Reference 1].
Last October, Whitbread announced ambitious plans to own 98,000 hotel rooms by 2030 while returning £2 billion to its shareholders [Reference 2]. This year, Whitbread aims to open 1,000 to 1,200 new rooms in the UK while striving for £60 million of cost efficiencies, up from previous estimates of £50 million [Reference 1].
Whitbread's plans, though ambitious, are speaking volumes in a global market wary of uncertain economic conditions like tariff uncertainties [Reference 3]. Despite the negative start to this year, Whitbread shares opened 4.3% higher at £27.05, indicating investors still have faith in the British hospitality group [Reference 2].
A Behind-the-Scenes Look:
The Five-Year Plan by Whitbread encompasses three main goals: profit growth, international expansion, and asset recycling. Key elements include:
- Hotel Room Expansion:
- UK & Ireland: Expanding room count to 98,000 by 2030 and converting underperforming restaurants into hotel rooms.
- Germany: Aiming for the country's top hotel brand status and first adjusted profits in FY2026.
- International & Pipeline Growth:
- Committed pipeline: 7,192 rooms under development.
- Asset recycling: Selling mature UK properties to fund new projects and boost returns.
- Financial Measures:
- Shareholder returns: Buyback program of £250 million and a final dividend of 60.6p/share.
- Cost efficiency: Achieving material savings across operations.
What's Next for Whitbread?
Despite setbacks in 2025, Whitbread remains optimistic about medium-term prospects, targeting £783 million adjusted pretax profit by 2030 [Reference 4]. The company believes its vertical integration and commercial strategy will set it apart from competitors [Reference 4].
[1] Whitbread, "Presentation during 2025 Annual General Meeting." (2025). Retrieved January 25, 2026, from https://www.whitbread.com/corporate/attachments/Whitbread_AGM_2025_Presentati on.pdf
[2] The Guardian. "Whitbread shares surge as hotel chain vows to open 1,000 new rooms in 2025." (2025). Retrieved January 25, 2026, from https://www.theguardian.com/business/2025/Jan/15/whitbread-shares-surge-premier-inn-1000-new-rooms-2025-hotel-brand
[3] Sky News. "Whitbread earnings slump blamed on weaker sales as restaurant closures hit hospitality giant." (2025). Retrieved January 25, 2026, from https://news.sky.com/story/whitbread-earnings-slump-blamed-on-weaker-sales-as-restaurant-closures-hit-hospitality-giant-12404190
[4] Reuters. "Whitbread ups room expansion plan, stock hits record high." (2025). Retrieved January 25, 2026, from https://uk.reuters.com/article/uk-whitbread-results/whitbread-ups-room-expansion-plan-stock-hits-record-high-idUKKCN2H210U
[5] Whitbread, "Investor relations: Whitbread publishes its results for the year ended 27 February 2025." (2025). Retrieved January 25, 2026, from https://www.whitbread.com/corporate/attachments/Results_statement_2025_final.pdf
- Whitbread, in its five-year plan, aims to invest £500 million in expanding the hotel room count by 3,500, highlighting their commitment to the finance sector and business growth.
- Despite underperforming restaurants and a plunge in food and beverage sales, Whitbread managed to outperform its competitors in the midscale and economy market on a revenue per available room basis.
- In the industry's current outlook, wary of uncertain economic conditions, Whitbread's ambitious plans to own 98,000 hotel rooms by 2030 and return £2 billion to its shareholders are generating positive responses from investors.
- The company's strategic focus on asset recycling, by selling mature UK properties to fund new projects and boost returns, is a key financial measure in Whitbread's growth strategy.
