Whitbread, the owner of Premier Inn hotels, plans to cut 1,500 jobs, representing around 4% of its total UK workforce.
The job cuts are in line with the budget hotel group’s plan to close 126 branded restaurants over the next two years. The group has already agreed to sell 21 of these restaurants for £28m.
In the financial year ending 29 February 2024, the 126 restaurants made £147m, but made a pre-tax loss of £9m.
The group plans to convert 112 branded restaurants into new hotel rooms in the next 24 months.
The announcement follows reports in March that Whitbread was considering selling or converting around a third of its Beefeater and Brewers Fayre pubs.
Whitbread said the strategy “will help fund our investment in building a bespoke, integrated restaurant in our hotels, as well as building new hotel rooms across the estate”.
Whitbread estimates it will require an investment of £500m over the next four years to support its expansion plans.
It warned that 1,500 roles out of 37,000 are now at risk, adding: “We will seek to find alternative opportunities wherever possible through the roles created by this plan and our current recruitment process.”
In its financial year 2024 results released earlier this week, Whitbread reported a 19% increase in pre-tax to £588m, while revenue per available room (RevPAR) rose 10% to £65.56.
Food and beverage (F&B) sales increased by 7% compared to the 23rd financial year. It was supported by high occupancy rates and strong breakfast sales, which grew by 14% year-on-year.
During the period, Whitbread added more than 2,000 new hotel rooms and achieved a 12% increase in UK accommodation sales. Growth was fueled by significant growth in both London (+17%) and regional areas (+10%).
The group also announced plans to launch a £150m share buyback programme.
Dominic Paul, chief executive of Whitbread, said: “Our loosely guaranteed balance sheet and continued investment strategy allow us to take advantage of the significant structural growth opportunity that exists following the decline in UK hotel supply.
“Against this background, we are increasing our pace to generate long-term profitable growth. In addition to our strong commercial program, we plan to optimize our food and beverage offering in several of our locations to open an expansion of up to 3,500 rooms, which will improve the service for our hotel guests and increase operational efficiency.
He added: “We understand that our transition will affect some of our team members, so we are offering support throughout the process and are committed to working hard to keep as many of those affected as possible with us.”
Whitbread’s Premier Inn owns the largest hotel group in Great Britain, with a market share of approximately 12% of the total supply of hotel rooms. In the UK, Premier Inn has more than 85,000 rooms in 853 hotels and employs 37,000 people.
