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Wed 21st Jun 2017 - Whitbread reports like-for-likes up 2.9%, Easyhotel agrees first leased site
Whitbread reports like-for-likes up 2.9%: Whitbread has reported like-for-like sales were up 2.9% in the 13 weeks to 1 June with total sales up 7.6%. Premier Inn like-for-likes rose 4.7% with total sales up 9.2%, restaurant like-for-likes were up 0.7% with total sales rising 2.1% and Costa like-for-likes grew by 1.1% with total sales up 8.7%. Whitbread chief executive Alison Brittain said: “We have had a good start to the year, with first quarter sales growth of 7.6%, in line with our expectations. Our continued drive to grow and innovate in our core UK businesses, focus on our strengths internationally and build capabilities to support long-term growth, combined with our ongoing cost efficiency programme, gives us confidence that we will make further good progress this year. Premier Inn continued to win overall market share with strong sales growth of 9.2% as we benefitted from a resilient hotel market and the contribution from the circa 9,000 rooms we opened over the past two years, which are maturing well. Our digital development team continued to innovate for our customers and we launched our personalised business-to-business booking platform that helped to maintain our direct bookings at 94% of sales. We were pleased total UK occupancy was up compared with the first quarter last year at 79.2%, at the same time as we increased our capacity. Costa sales grew 8.7% with UK equity like-for-like growth of 1.1% and a good performance in our expanding travel and drive-thru channels. We are focused on executing on our initiatives, rolling out ‘Cold Brew’ in more than 200 of our stores and our latest summer Frostino and cooler drinks have just gone on sale this month. We also successfully introduced our new breakfast range towards the end of the quarter, with further new food ranges launching throughout the year. Costa Express continued its expansion with 300 net installations during the quarter. In May we officially opened our new Roastery giving us capacity to grow over the next 20 years and provide us with an industry-leading centre for coffee innovation and training. Internationally, in Germany our Premier Inn hotel in Frankfurt is performing well and we continue to develop our current committed pipeline of five hotels. Meanwhile, in Costa, we are seeing good progress in China with positive like-for-like sales growth. We aim to accelerate the development of our international businesses in these attractive markets and continue to look for opportunities to grow more quickly. In line with our property strategy we completed the sale and leaseback of our 247-bedroom hotel in Shoreditch, with proceeds of £51m representing a good yield of just under 4%, reflecting the strength of Whitbread’s covenant. We expect proceeds of around £100m to £150m from sale and leaseback transactions this year. We have a clear plan to deliver growth in our existing estate and remain on track to open circa 4,200 hotel rooms, 230 to 250 Costa coffee shops and install circa 1,250 Costa Express machines this year.”
Easyhotel agrees deal for first leased site, in Oxford: Easyhotel, the owner, developer, operator and franchisor of “super budget” branded hotels, has agreed a deal to open its first leased site, in Oxford. The company has signed a 25-year lease for the new purpose-built Easyhotel in Summertown, a residential and shopping district less than two miles from Oxford city centre. The site is to be redeveloped as a mixed use property. A new purpose-built 180-beroom Easyhotel will occupy the first and second floors of the property and is expected to open in the second half of 2019. The agreement is subject to planning permission. The company stated: “Oxford is a key economic centre in the UK and a popular tourist destination where demand for hotel accommodation is consistently strong. High land costs and the lack of suitable, available sites have made Oxford a very difficult city within which to develop hotels in general, and budget hotels in particular, with only 200 new hotel rooms having opened in the city in the last five years. Oxford will be the group’s first leased site. The hotel will be let on a 25-year fully repairing and insuring lease at an annual rent of about £1.2m. The hotel will be developed by 4Urban Consulting through its investment vehicle GHSR LLP, in accordance with Easyhotel’s specifications. 4Urban are backed by the Bramall family. As previously announced on 23 May 2017, the board will only consider leased sites on a limited and specific basis for strategic locations where the acquisition of freehold or long leasehold interests do not meet the board’s investment return targets. This will enable the company to increase the number of hotel rooms under its direct control and grow its earnings at a lower capital cost while, at the same time, maintaining a risk balanced approach to covering the group’s future lease obligations. The Oxford site takes Easyhotel’s pipeline of owned development projects to 781 rooms in addition to the 1,236 franchise rooms currently under development.” Chief executive Guy Parsons added: “Oxford is a premier business and tourist destination with more than seven million visitors per year. The city has been on our target list for some time and we are pleased to have agreed terms on this new hotel, which will be the closest branded budget and super budget hotel to the city centre. The board looks forward to announcing further opportunities for the Easyhotel brand as we expand our development pipeline.”

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