Premier Inn owner could cut 6,000 jobs as demand slumps

PREMIER Inn owner Whitbread has warned it could axe up to 6,000 jobs as the coronavirus crisis continues to hit demand for hotel stays.

The company said that sales in the first half of the year were “significantly down year-on-year” after it had to close most of its hotels and restaurants for the coronavirus lockdown.

It said it was performing ahead of market since being able to re-open and that it had 98% of its hotels operational by the end of the accounting period.

But the company’s hotels are still almost half empty, with occupancy levels reaching only 51% in August. The Eat Out To Help Out scheme had helped restaurant sales but total revenues were still down 38.5% year-on-year in August.

Whitbread is now looking to cut 6,000 jobs - almost a fifth of its workforce - as a result of reduced demand, saying it hopes the reduction can be achieved through voluntary redundancies.

Chief executive Alison Brittain said: “Our teams have worked very hard to reopen our hotels and restaurants and we are now firmly in the ‘restore’ phase of our response to the Covid-19 crisis.

“Our performance following the reopenings has been ahead of the market, however, it has been clear from the beginning of this crisis that even as restrictions are eased that demand would be materially lower than FY20 levels for a period of time. Given this backdrop, we have already taken extensive action to protect the business, retain financial flexibility and position it for long-term success.

“With demand for travel remaining subdued, we are now having to make some very difficult decisions, and it is with great regret that today we are announcing our intention to enter into a consultation process that could result in up to 6,000 redundancies in the UK, of which it is hoped a significant proportion can be achieved voluntarily.”