Executives at Premier Inn, the United Kingdom’s largest hotel brand by hotel count, said they are in a buoyant mood; the company's latest earnings report revealed year-on-year increases in demand and reductions in operational costs.
They said the firm is positioned well to take advantage of upside due to its strong brand and commercial program, and they said they felt confidence in the market’s underlying demand fundamentals.
In its development pipeline are 3,500 rooms.
Improvements in its revenue per available room metrics saw notable upswing in the last quarter of 2025, according to Dominic Paul, CEO of Premier Inn's parent company Whitbread PLC.
Speaking at Whitbread's third-quarter full-year 2026 earnings results on Jan. 13, he said it was a relief to have not experienced heavy expenses that have hit — and many fear will continue to hit — the United Kingdom hotel industry, such as weightier business rates and local taxes, increased National Insurance contributions, and more expensive construction, food and beverage, and hotel supplies.
Paul said gross inflation will affect the hotel firm's £1.7 billion ($2.3 billion) cost base by between 6.5% and 7.5% in the upcoming year.
He added he expects the weight of net U.K. inflation on Whitbread’s trading in full-year 2027 to be between 3% and 4%. Officially, inflation in the U.K. is currently at 3.2% as last announced in November 2025.
Paul said the Dunstable, England-based firm has reduced its guidance on expected full-year expenses from approximately £40 - £50 million to approximately £35 million, mostly due to the government’s assurances of changes in the calculations of business rates.
He added that Whitbread, along with the wider U.K. hotel and hospitality industry, are actively engaged in dialogue with the government over continued changes to how business rates are calculated.
“We increased our expected savings in full-year 2026 by a further £10 million to between £75 million and £80 million,” he said.
Paul said business on the books is performing better this year than it was for the same period in 2025.
“We are very confident of delivering long-term trading value,” he added.
Rebound
In an accompanying statement, Paul said, “in the U.K., the overall market continued its return to growth and we delivered a positive RevPAR performance, which has continued and stepped up in the current trading period. The structural shift in supply, together with our brand strength and commercial [program], means we are confident in our ability to maintain a healthy RevPAR premium versus the market.”
Paul said there had been “strong trading momentum in both the U.K. and Germany …. [which has] strengthened into the current trading period. In the U.K. the return to market growth we saw in the summer has continued, and occupancy remains high at 83%.
“We traded particularly well in London where we increased both occupancy and rate, resulting in RevPAR up 7% versus the prior year,” he added.
That RevPAR performance followed six consecutive quarters of decline.
Paul said the metric saw for Whitbread an “inflection point [last] summer.”
He added in Germany, its second market of scale, he was “confident of reaching profitability this year.”
There, revenue increased in the third quarter in year-on-year terms by 12% and RevPAR by 7%.
Offloads
Hemant Patel, chief financial officer of Whitbread, said, “at the beginning of the (financial) year, [Whitbread is] guiding to £253 million of disposable proceeds for the full year.”
Its latest disposal was the sale-and-leaseback deal with LondonMetric Property that was announced in tandem with its latest earnings report.
LondonMetric acquired nine Premier Inn hotels in the south and southeast of England for £89 million and became Whitbread’s fourth-largest tenant.
Patel said he was “happy with [that] pricing … [and are] maximizing returns to our shareholders.”
Other notable developments have taken place in the past 12 months.
In February 2025 it opened its first hotel in Austria with the 180-room Premier Inn Wien City in Vienna, and in December it announced it had secured planning permission to convert Dorset House in the Southwark district of London into a 421-room Hub by Premier Inn hotel due to open in summer 2028.
Whitbread currently has more than 85,000 rooms in the U.K. in more than 850 hotels, and its U.K. pipeline shows about 8,000 rooms.
As of press time, Whitbread PLC stock was trading at £27.70 a share, a decrease of 4.61% year over year. The London Stock Exchange’s FTSE 100 index was up 23.6% over the same period.