Premier Inn cuts 1,500 jobs as restaurants are converted into rooms

Premier Inn is set to expand its UK capacity to 97,000 rooms in a £500 million expansion plan over four years.

The budget chain aims to add 3,500 rooms, including the conversion of 112 restaurants.

A further 126 “lower-performing” restaurants will be sold, including 21 which have been disposed of for £28 million.

The changes will affect 1,500 jobs out of a total UK workforce of 37,000.

The UK’s largest hotel group currently has 853 hotels.

Parent company Whitbread said: “While these plans are still subject to consultation, we will seek to find alternative opportunities wherever possible through the roles created by this plan and our existing recruitment process that makes c.15,000 hires each year.”

The plans, designed to drive increased margins, were disclosed as Whitbread reported that Premier Inn had delivered a record pre-tax profit in the 2023-24 financial year.

Total UK Premier Inn accommodation sales rose by 12% year-on-year as Whitbread reported a 36% rise in pre-tax profit to £561 million.

The company said that “whilst midweek demand has been robust, the phasing of public holidays impacted weekend demand in certain leisure locations; this meant that total accommodation sales were 1% behind.

“However, the strength of our brand and commercial programme meant that we continued to outperform the midscale and economy market”.

Premier Inn has continued to broaden its appeal to business travellers through different channels including a dedicated business booker portal as well as via Travel Management Companies. 

“Together, these channels represented approximately 20% of total accommodation sales in FY24, up from 17% in FY23,” the annual; results statement said. 

Whitbread chief executive Dominic Paul, former senior vice president, international, at Royal Caribbean, said: “We have delivered an outstanding set of results in FY24, led by the strength of our UK hotels business. 

“Our increased levels of profitability, operating cashflow and return on capital reflect the power of our unique operating model. 

“Our freehold-backed balance sheet, together with our strategy of continuing to invest, is allowing us to take advantage of the significant structural growth opportunity that exists following the decline in UK hotel supply.

“Against this backdrop, we are increasing our momentum to deliver long-term profitable growth. In addition to our strong commercial programme, we plan to optimise our F&B [food and beverage] offer at a number of our sites to unlock up to 3,500 room extensions that will enhance the service for our hotel guests and deliver increased operational efficiencies.

“We recognise that our transition will impact some of our team members so we will be providing support throughout this process and we are committed to working hard to enable as many as possible of those affected to remain with us.”

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