Whitbread PLC (LSE:WTB) said the onset of new Coronavirus (COVID-19) restrictions hampered growth in the UK but predicted trading would return to pre-pandemic levels later this year.
The Premier Inn owner added it expects inflation to be an issue as it moves into the new financial year with sector price rises set to be between 7-8%, which would affect £1.4bn of Whitbread’s cost base.
In an update, it said total domestic accommodation sales growth slowed to 5.1% in the six weeks to January 6 compared with a 10.6% advance in the quarter to November 25.
However, both figures represented a significant outperformance against the wider market, the company told investors.
Counter-balancing this was an 11.6% drop in food and beverage sales in the three months, dragging total UK sales growth down to 3.1%.
In Germany, where it has 32 open hotels, total sales were down 24%, though occupancy levels were up sharply quarter on quarter to almost 60%.
"We maintain our expectation that Premier Inn UK like-for-like RevPAR run rates will recover to pre-COVID-19 levels during 2022," the statement said.
"Sector cost inflation in FY23 (is) expected to be above historic average levels. The group expects to be able to largely offset these higher levels of inflation through cost efficiencies, estate growth and higher price."