Staff at Irish hotels in the Premier Inn group are in line for bonuses as the UK-based owner of the budget hotel chain seeks to retain staff amid “chronic” labour shortages and escalating cost pressures.
Whitbread is spending £23 million (€27.3 million) to retain staff at its Premier Inn hotels.
Alison Brittain, Whitbread’s chief executive, said the surge in domestic holiday bookings had contributed to “a challenging operating environment” and that the industry faced “a quite chronic shortage of people”.
With the fight for labour becoming increasingly acute, Whitbread is paying a £10 million bonus to staff who worked through the summer and stayed until the October half-term holiday this week, it said. It has also increased staff salaries at a cost of £12 million to £13 million, it said.
The group said it was also facing increasing food, drink and energy costs.
A spokeswoman for the company confirmed the bonuses would apply to “Irish colleagues” but could not confirm whether they are also in line for pay rises.
Despite record demand for domestic holidays, driven by tough restrictions on international travel over the summer, several hotel and restaurant businesses have been forced to cut the number of rooms or restaurant tables available because they do not have staff to serve them.
Whitbread has 80,000 rooms in its Premier Inn hotels, making it the UK’s largest hotel chain. It also has a growing portfolio in Germany, where it operates about 5,000 rooms. The company is currently looking to hire about 2,000 additional staff to reach a total headcount of between 33,000 and 34,000.
Staycation boom
Whitbread said increases to salaries and the once-off staff bonus would not prevent it returning to pre-Covid-19 revenues in 2022, a year earlier than it had previously forecast, thanks to the staycation boom.
The company reported that trading in August had been 10.5 per cent higher than during the same period in 2019 and was “ahead of expectations”, even though bookings had slowed in September.
In its British hotels, revenue per available room – the hotel industry’s guiding metric – “has the potential to return” to a pre-Covid run rate in 2022, Whitbread said.
Overall revenues in the six months to the end of August were £662 million, 39 per cent below the same period in 2019. It recorded a £19 million pre-tax loss, down from a £220 million profit in the equivalent period two years ago.
Ms Brittain said the struggle to recruit staff was not holding up Whitbread’s expansion plans.
It aims to open 3,000 rooms each year in Britain, reaching 110,000 rooms overall across bigger, more efficient hotels. In Germany, Whitbread said it had deals signed for more than 8,000 rooms and saw potential to reach 60,000 rooms in total as it takes advantage of the fragmented German hotel market.
Whitbread has consistently outperformed the budget hotel sector but analysts warned that its market share gains came at a cost.
Richard Clarke, an analyst at Bernstein, pointed out that the company had spent £20 million on increased marketing and that a full recovery of its margin would rely on “rare pricing power” given the inflationary cost pressures. – Copyright The Financial Times Limited 2021
