Whitbread - The strong get stronger
Confirmation of recovery ‘much broader than staycations’, backed by continued significant outperformance of the midscale and economy hotel market in the quarter to May, highlights a predictably positive update by Whitbread. That is not to play down expected ‘very strong’ demand throughout the summer at tourist locations (c 15% of the estate). While key office-based demand may not pick up meaningfully until the autumn, robust finances, brand strength and economies of scale should allow Whitbread to benefit materially on pandemic fallout (Q122 saw further estate improvement in the UK and an expanding pipeline in Germany). The delay in easing UK lockdown restrictions until 19 July does not change management’s outlook and guidance for the full year to February 2022.Whitbread is a hospitality company. Co. serves its customers in the U.K. and beyond through its two businesses: Premier Inn and Restaurants; and Costa. Premier Inn is a hotel business, with over 760 hotels and more than 68,000 rooms as of Mar 2 2017. Co.'s hotel are located alongside its own restaurant brands. Co. also have hotels in the Middle East, and Germany, with more hotels in the pipeline. Costa is the coffee shop, with over 2,200 coffee shops in the U.K., over 1,300 stores in 29 international markets and over 6,800 Costa Express self-serve units as of Mar 2 2017.
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