Whitbread, the owner of the Premier Inn hotel chain, said pre-Christmas travel restrictions to control the spread of coronavirus contributed to sales falling by more than half.
Accommodation sales were 55 per cent below last year’s levels in the three months to November 26, which included strict restrictions and a lockdown in England from November 5, the group said on Thursday.
Despite the limitations on travel, Premier Inn kept the “vast majority” of its hotels open during the period, it said, adding that it had managed to increase its UK market share marginally.
Alison Brittain, chief executive, said that she expected the lockdown and subsequent strict tiered system to last until the end of April, which would be “the worst of this period”.
Occupancy levels reached a peak of 58 per cent for the quarter during September before tiered restrictions were introduced in England as well as a lockdown in Wales. During the English lockdown, occupancy fell to 35 per cent. In December, the company’s total UK accommodation sales were down by more than two-thirds compared with 2019.
Whitbread said that two-thirds of its hotels were currently open but only for key workers and permitted business trips.
Around 23,000 of its 34,000 employees are on either full or part-time furlough. It cut 1,500 jobs — fewer than the 6,000 it had forecast — in October last year.
It is also negotiating with its landlords for 50 per cent rent reductions at its leased hotels, which account for about a third of its estate, and said that its losses would rise in Germany, where it recently bought 13 hotels, bringing its total there to 29.
Alex Brignall, an analyst at Redburn, said that Whitbread was “better placed than many” but “the real question is how margin recovers after pandemic if there has been demand destruction”.
Ms Brittain said that she expected consumer confidence to return towards the summer as vaccines were rolled out. She also called for an extension to the business rates reprieve granted to retail and hospitality businesses during the crisis and the reduction in VAT — both of which last until April.
“Having a vibrant hospitality sector is important to having jobs and paying tax again,” she argued.
Whitbread had net cash of £40m at the end of December, compared with £196.4m at the end of August. It also has £815m cash on deposit thanks to £1bn rights issue that it carried out in June — one of the largest for a UK-listed company during the pandemic.