British hotel owner Whitbread Plc (WTB.L) on Thursday reported a 2.4 percent increase in third-quarter sales and expects 2019 results to be in-line with expectations, as the expansion of its Premier Inn chain pays off.
The company, which sold its Costa business to Coca-Cola Co (KO.N), reported 9.8 percent sales growth in its London market but flagged weakness in the overall UK market, which rose only 1.8 pct in the third quarter ended Nov. 29, 2018.
“The UK environment remains subdued and sustained inflation continues to be a significant challenge,” the company said in a statement, adding that underlying pretax profit for 2020 will be at the same level as this year.
“We are cautious about the macro environment for the next financial year due to increased uncertainty and continuing high inflation,” Chief Executive Officer Alison Brittain said.
Whitbread’s hotel business faces rising competition from online services such as Airbnb and OYO Hotels, compounding worries of inflation and a dip in consumer confidence that is forcing Britons to rein in spending.
In response to industry changes, Whitbread is aggressively expanding internationally, specifically in Germany and is targeting the UK budget market with “Zip” rooms that start from 19 pounds per day, in an aim to boost sales at home.
The company, which traces its history back to 1742, said it began an initial share buyback programme of up to 500 million pounds on Thursday.