Premier Inn owner Whitbread warned today that there were signs of weakness in the UK budget hotel market, most notably in London.
In a third quarter trading update, it said October had been ‘particularly challenging’, although performance in the fourth-quarter has been ‘encouraging’.
Premier Inn UK sales were up 5.5% during the third quarter following Whitbread’s investments in new hotels and extensions.
Across the whole group, which includes the Costa coffee shop chain, like for like sales were up only 0.3%.
CEO Alison Brittain said: "We remain committed to delivering our strategy to invest in the attractive structural growth opportunities in the budget hotel market and the growing coffee markets, in both the UK and internationally.
"We do expect the tough UK high street environment and inflation in our sector to continue to pose challenges in the year ahead.
However, we have good momentum in the delivery of our plan to enhance our UK market leadership positions, create an international business of scale in Germany, China and Costa Express, and develop a more efficient infrastructure.
"This will create further customer loyalty and deliver long-term growth in earnings and dividends and a strong return on capital."
