Whitbread to Close Restaurants, Convert to Hotels, Adding 3,500 Rooms
Whitbread, the owner of Premier Inn, has announced plans to close underperforming restaurants and convert them into hotel rooms. This move will result in the loss of 1,500 jobs.
The company intends to convert 112 restaurant sites with lower returns into new hotel accommodations and divest 126 others. This will ultimately add 3,500 rooms to Whitbread's portfolio over the next five years.
Whitbread has already finalized the sale of 21 restaurants for £28 million. Dominic Paul, the current chief executive, highlighted the company's strong financial position and investment strategy, which allows it to capitalize on the growth opportunities presented by the evolving UK hotel landscape.
While acknowledging the short-term impact on profit performance this year, Paul expressed confidence in the anticipated uplift from the 2027 financial year onwards. He expects subsequent increases in margins and returns as the new hotel extensions are rolled out.
This growth initiative was disclosed alongside Whitbread's full-year results, which revealed a 21% surge in pre-tax profits to £452 million. This was driven by a 13% revenue increase to £2.96 billion, buoyed by UK expansion and continued progress in Germany.
Whitbread has announced a final dividend of £115 million, up 26% from the previous year to 62.9p per share. The company also plans to repurchase shares worth £150 million.
Although total sales for the seven weeks ending April 18 were marginally lower, primarily attributed to public holidays, management anticipates a positive upswing in demand across both business and leisure segments in the coming weeks. This is supported by the company's forward booked revenue position.