Business review
Whitbread Hotels and Restaurants
| Hotels and Restaurants | 2008/09 £m |
2007/08 £m |
% Change |
|---|---|---|---|
| Premier Inn revenues | 601.5 | 527.8 | 14.0 |
| Restaurants revenues | 460.1 | 446.1 | 3.2 |
| Total revenues | 1,061.6 | 973.9 | 9.0 |
| Premier Inn like for like sales | - | - | 6.0 |
| Restaurants like for like sales* | - | - | 4.6 |
| Operating profit (pre exceptional) | 254.9 | 233.5 | 9.2 |
| Segmental operating profit (post exceptional) | 240.2 | 223.5 | 7.5 |
*2.8% excluding closure periods
Hotels and Restaurants performed well in an increasingly challenging consumer environment. Total revenues increased by 9.0% to £1,061.6 million with pre exceptional operating profit up 9.2% year on year to £254.9 million. Like for like sales were up 5.4%. Cost efficiencies continued to be a top priority.
Premier Inn continued to outperform the hotel market as we expanded our network of sites, building on our leading position. Total sales at Premier Inn increased by 14.0% to £601.5 million (2007/08: £527.8 million). Revenue per available room (revpar) performance grew by 2.8% on a like for like basis. Like for like sales were up 6.0%. In addition to revpar growth, extensions contributed 3.2% with the balance from food and beverage.
Looking back at our like for like sales trends there was a strong first half performance followed by a softening as we entered the more challenging periods in the autumn. Like for like sales entered predominantly negative territory from December.
Premier Inn's value proposition continues to attract corporate customers, and it is now the leading choice brand among business travellers. Sales via the Premier Inn Business Account grew by 24% to £171 million. Business guests can save around £40 per night compared to 3 and 4 star hotels. Last year Premier Inn opened 4,553 rooms, 1,245 of which were delivered through the acquisition of 21 prime location hotels from Mitchells & Butlers plc in exchange for 44 Whitbread restaurants.
In the year, we added 13 new hotels on joint sites where we own and operate both a hotel and a restaurant. Our joint sites generate higher returns and contribute nearly two thirds of Whitbread Hotels and Restaurants' unit operating profit.
Premier Inn is working towards a greener future. In December 2008 we opened a flagship hotel, located in Tamworth, to trial the best environmental initiatives. These initiatives include new technologies such as heating from natural energy, recycled water, 'smart' low energy lighting and heat recovery ventilation. We have also increased the use of sustainable timber and locally sourced materials.
Our branded restaurants have delivered good progress in the year, as we continue to attract customers looking for fresh and well-prepared food at great prices. Revenues have increased by 3.2% to £460.1 million (2007/08: £446.1 million). Our restaurants achieved a like for like covers increase of 7.9% and a like for like sales increase of 4.6% assisted by new menus and improved environments. Average like for like spend per head on food is £7.46.
In an early response to food price inflation, we took steps to re-engineer menus with more emphasis on the value proposition and a focus on lower cost dishes. As a result, we have been able to introduce every day great value offers such as Brewers Fayre's two main meals deal for £9. We now have a total of 372 restaurants with 328 on joint sites. This comprises 130 Beefeaters, 130 Brewers Fayres, 105 Table Tables and 7 Taybarns. We have reduced the remaining portfolio of stand-alone restaurants in the year to 44.
At the beginning of the financial year we committed to maintaining the quality of our estate by undertaking a refurbishment programme across 42 Brewers Fayres. We will continue this in 2009/10 with a refurbishment of a further c80 restaurants at a cost of around £10 million. Our approach to capital investment in this area has been very disciplined and will continue to be so.
