Premier Inn owner Whitbread PLC (LSE:WTB) could impress shareholders when it reports first-quarter results on Thursday, according to Shore Capital analysts.
Rival Travelodge recently reported “continued robust trading” in its first quarter update, with analysts thinking this will be the same for Whitbread.
Revenue per available room (RevPAR), a key indicator used in the hotel industry, was up 31% for Travelodge in the three months to April compared to the same period in 2019.
The budget hotel group saw sharp improvements in London business, while white-collar demand recovered at a more gradual pace.
Improving trends means Shore Capital now see Whitbread making £426mln in pre-tax profits during the 2024 financial year.
Analysts at the capital markets firm said: “The key moving parts being a modest increase in UK operating profit and a £25mln improvement in underlying German losses.”
“Given the strength of trading at the start of the current year and continued momentum from peer Travelodge, the forthcoming Q1 update will likely put upward pressure on our full-year revenue assumptions.”
Inflation, which Whitbread sees at 7%-8%, isn’t expected to increase further during the current financial year, with “broader cost pressures beginning to abate”.
Shore Capital maintains its ‘buy’ rating for Whitbread, with the hotelier currently trading at around 3,420p.