Whitbread Announces Job Cuts as Part of Expansion and Restructuring Strategy
Posted by Emma on 30th Apr 2024
Whitbread, the parent company of Premier Inn, has announced plans to cut 1,500 jobs, approximately 4% of its total UK workforce, amidst its ongoing growth initiatives. The job reductions are linked to the company's decision to divest 126 branded restaurants over the next two years. These restaurants, which brought in £147m in revenue and a pre-tax loss of £9m in the fiscal year ending 29 February 2024, have already seen 21 locations sold for £28m.
As part of its restructuring, Whitbread aims to transform 112 restaurants into new hotel rooms within 24 months. This follows earlier reports that the company sought to sell or repurpose about a third of its Beefeater and Brewers Fayre establishments.
The strategy supports Whitbread's broader objectives, including integrating more tailored restaurants into its hotels and adding approximately 3,500 new rooms across its properties within five years. This expansion will require a £500m investment over four years.
Whitbread's latest fiscal results revealed a 19% increase in pre-tax profits to £588m, with revenue per available room rising by 10% to £65.56. Food and beverage sales saw a 7% increase, bolstered by high occupancy and a 14% boost in breakfast sales.
Additionally, the company added over 2,000 new hotel rooms during this period, leading to a 12% increase in UK accommodation sales. The company also announced a £150m share buyback program.
CEO Dominic Paul commented, "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 following the decline in UK hotel supply."
Despite the growth, the restructuring will impact employees, with Whitbread committed to supporting affected staff and exploring alternative employment opportunities within the company.
Whitbread's Premier Inn remains the largest hotel group in the UK, holding a 12% market share with over 85,000 rooms across 853 hotels.