Whitbread cheers improving demand as Q1 sales rise by 1% to £739million

Whitbread said total group sales increased by 1% to £739 million for the three months to May 30

Whitbread, the hotel and pub company, has reported an increase in trade across its UK Premier Inn hotels in recent weeks.

However, the firm, which is listed on the London Stock Exchange, noted that demand was "slightly softer" during the weekend in certain areas, including London, which had seen particularly strong performance last year. The company, which also operates the Beefeater and Brewers Fayre brands, revealed that total group sales rose by 1% to £739million for the three months to May 30, compared with the same period last year.

Whitbread informed investors that sales were down 1% year on year over the first seven weeks of the quarter, but accommodation demand bounced back to match the previous year. "While midweek business demand and peak leisure demand remained robust, weekend demand at short-lead was slightly softer, particularly in London, reflecting a return to more normalised levels after what was a very strong performance last year," Whitbread stated on Tuesday.

Its Premier Inn business in Germany reported a 15% increase in total sales. Dominic Paul, chief executive of the hospitality group, said: "Whilst the normal booking pattern means our forward visibility remains limited, our forward booked position is positive and we remain confident in the full-year outlook."

"This reflects a more encouraging trading performance in the UK, our strong commercial programme and increased cost efficiencies, as well as good progress in Germany."

Food and beverage sales dipped by 1% compared to last year, with a surge in hotel breakfasts failing to makeup for the slump in some of its branded eateries. Mr Paul, has confirmed that the company is on schedule with its earlier announced plans to overhaul its food and beverage operations, which will see over 200 restaurants either shut down or transformed, resulting in around 1,500 job losses.

The strategy also includes an ambitious expansion to add more than 3,500 rooms to its hotels and enhance "operational efficiencies". Market experts at Jefferies have noted that Whitbread's recent financial results have "came in slightly ahead of our estimates".