Whitbread is to expand into Germany after record demand for rooms at its Premier Inn hotels and a strong performance from the Costa Coffee chain gave the UK group the confidence to take its business model into mainland Europe. 

Whitbread is Britain's biggest hotel and coffee shop operator.

It said today it had bought the freehold of a 200 room hotel in Frankfurt to trial its Premier Inn offering. 

"We believe that the German hotel market is attractive for Premier Inn with its large scale, low level of branded budget penetration and relatively similar property market characteristics to the UK," it said. 

The group, which is also expanding into the Middle East, South East Asia and India, announced its move into Germany as it reported first-half underlying pretax profit up 18.5% to £256m, ahead of a company compiled analyst consensus of £249m. 

The group said the strong momentum from the first half had continued into the first few weeks of the second half, meaning it was well positioned to hit its full-year targets. 

Whitbread also raised its interim dividend by 15.6% to 25.2 pence. 

Whitbread has grown rapidly in recent years due to demand from cost-conscious customers for affordable hotels and takeaway coffee, which has driven growth at its Costa chain. 

Total half-year revenue rose 13% to £1.3 billion, including underlying sales growth of 9.6% and 6.1% at Premier Inn and Costa Coffee respectively. 

"The trading momentum of our strong first half performance has continued into the first few weeks of the second half and positions Whitbread well to deliver full year results in line with expectations," Whitbread said.