Whitbread, the parent company of Premier Inn, has sold 51 of its restaurants for £56 million as part of a major restructuring plan aimed at refocusing on its more profitable hotel operations. The sale is a key element of Whitbread’s wider strategy to streamline its portfolio and improve cost efficiency.

Earlier this year, the company announced plans to divest 126 underperforming Beefeater and Brewers Fayre locations, in response to changing market conditions. Alongside the sales, Whitbread plans to repurpose 112 of these restaurant sites, converting them into additional hotel rooms to drive growth for its Premier Inn brand.

The sale of the 51 sites marks an important step in Whitbread’s strategy to enhance profitability, particularly within a challenging hospitality sector. The food and beverage market has seen declining demand, with a notable drop in both business and leisure travel when compared to the post-pandemic surge of the previous year.

Although Whitbread reported a total revenue of £1.57 billion for the six months leading up to August 29, its pre-tax profits have dropped by 22%. This decline has prompted the company to intensify its cost-cutting measures, targeting £50 million in annual savings as part of a long-term plan that extends to 2030. Furthermore, concerns over potential increases in employer taxes could add additional pressure on profitability within the industry.

Looking ahead, Whitbread is fully committed to expanding its Premier Inn brand. The company has set an ambitious target to increase its room count from the current 86,000 to 125,000 across the UK and Ireland. Additionally, Whitbread is eyeing significant growth opportunities in Germany, which boasts a hotel market 40% larger than the UK.

By shedding underperforming restaurant assets and reinvesting in its core hotel operations, Whitbread aims to secure a more streamlined and profitable future amidst an ever-evolving hospitality landscape.

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