Whitbread PLC (LSE:WTB) shares fell 2% on Thursday after the company reported a further dip in hotel revenue in the UK, despite stronger performance in Germany.
Analysts at Peel Hunt said the company is still holding up better than the wider market but warned that its UK outlook remains under pressure.
Revenue per available room (RevPAR) in the UK dropped 2% in the first quarter, while food and drink sales were down 16%, partly due to ongoing restaurant closures as sites are converted into hotel rooms.
By contrast, Germany was a bright spot, with RevPAR up 12% overall and 17% at more mature sites.
Peel said Whitbread’s plans to return £2 billion to shareholders over five years remain on track, and the company is ahead of last year on forward bookings.
But the broker flagged risks to its full-year forecasts unless UK performance improves sharply in the second half.
It still rates the stock a ‘buy’ with a target price of 3,840p, pointing to strong long-term value, especially if Germany turns profitable and new hotel openings pick up pace.
"Whitbread continues to create value," Peel said. "Room openings are accelerating, with a skew toward higher-priced London locations; penetration of the business market is increasing; and independent competitors are struggling."
The stock fell 65p to 2,725p.