Whitbread PLC (LSE:WTB) said demand for accommodation is recovering but getting staff to work in its hotels is proving to be a major problem.
A material number of vacancies are unfilled, said the Premier Inn owner, with pay rises of £12mln-£13mln already written in for this year.
Retention bonuses will cost an additional £10mln to keep hotel and restaurant staff in the second half of 2022.
Whitbread added that it is in a better position than most peers due to the action taken last year that saw fewer staff let go than anticipated.
Demand for rooms meanwhile remains high, with a buoyant summer in the UK continuing into the second half with demand remained high in September and into October.
The absence of virtually all UK COVID-19 restrictions on leisure events, such as weddings, sporting events and eating out, bodes well for ongoing leisure demand, it added, with trade demand staying resilient.
Sales in the six months to end August 2021 recovered to £662mln (£251mln), while losses were reduced to £19.3mln from £725mln.
Alison Brittain, Whitbread's chief executive, said the company believes that UK like-for-like RevPAR [revenue per room] run rates have the potential to reach full recovery at some point during 2022.
Shares rose 1.4% to 3,200p.