British hotel company Whitbread reported another quarterly decline in sales today amid subdued leisure demand from cost-conscious customers, and said it was unclear when the broader industry would return to growth.
Britain's hospitality firms are struggling to recover after a surge in inflation hit consumer spending, with a rise in employer costs and global economic uncertainty adding to the challenges.
Whitbread CEO Dominic Paul said the owner of the Premier Inn chain was trying to boost revenue and customer retention by offering extras such as rooms with a view, early check-ins, late check-outs and premium Wi-Fi.
But he added that the wider market remained subdued with no clear visibility on when revenue per available room - a key industry metric - would return to growth.
"Overall, as a market it's impossible to say the point at which the RevPAR will reflect positively," he said on a call with analysts.
Whitbread, which is refurbishing underperforming restaurants, adding more rooms and cutting jobs to control costs, said total accommodation sales in the UK dropped 2% year-on-year in the quarter ended May 29.
Its shares have fallen about 8% so far this year.
"Slower trading momentum and limited forward sales visibility will leave the market wary, especially as weak consumer confidence and rising costs from the Budget continue to pile on the pressure," said Julie Palmer, a partner at Begbies Traynor, referring to UK government tax increases on employers.
Whitbread posted a 4% drop in first-quarter total sales from a year ago, but said forward bookings in the UK were tracking ahead of last year and that it remained on course for its German hotels to start generating profits this fiscal year.
