Premier Inn suffers a drop in sales as the recession hits the hospitality market.

The UK’s biggest hotel chain, Premier Inn, has suffered sharp fall in sales as the hospitality trade suffers the effects of the credit crunch.

Whitbread PLC, owner of Premier Inn and Costa and the UK’s largest hotel and restaurant group, announced its trading performance results for the first quarter of 2009.

Like-for-like sales at Premier Inn fell 7.9% in the 13 weeks to June this year. The drop in sales is worrying for Whitbread as Premier Inn contributes 70% of the group’s total earnings. Revenue per room has also fallen 9.6%.

On a more hopeful note for Whitbread, sales at its pub restaurants, including Brewers’ Fayre and Beefeater, and its coffee chain, Costa, have both experienced a rise.

Costa has delivered a strong sales performance, mainly attributed to its highly effective marketing campaign. Whitbread opened 49 new Costa cafes across the UK in the quarter, bringing the total number of outlets to 930 in the UK.

Across Whitbread as a whole, like-for-like sales have dropped 2.7%.
 
Despite the disappointing figures for Premier Inn, the company has taken steps towards expanding its share of the leisure and hospitality market. In the first quarter of 2009, the firm has opened six new hotels and aims to deliver a further 2,000 new hotel rooms worldwide during the remainder of the year. Premier Offers was also launched, which offers hotel rooms at £29 a night.

Whitbread remains cautiously optimistic about the company’s future. Alan Parker, CEO of Whitbread, said: “We believe that Whitbread’s brands are well placed in their markets, although the outlook is challenging.

“We will continue to play to our strengths and we are focused on our three key priorities: to outperform our competition, to achieve cash flow neutrality and to reduce operating costs.”