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Whitbread slumps to £1bn loss but most hotels now open

Whitbread PLC (LON:WTB) has slumped to an eye-watering £1bn full-year loss but most of its hotels are now open.

The FTSE 100 group expects strong demand for ‘staycations’ in the UK, where 92% of its hotels are open and leisure customers will be allowed to check-in from 17 May.

READ: Whitbread hoping to draw a line under lockdown as Scotland starts to reopen

In Germany 18 of its operational 30 hotels are open, with six of the temporarily closed hotels being refurbished and rebranded to Premier Inn.

However, the European country has recently tightened coronavirus (COVID-19) restrictions again, though the hotel operator said it is “in a strong position to win market share” when demand returns.

Whitbread forecast investments of £350mln this year, including room refurbishments and marketing to aid recovery.

It will also open 2,000-3,000 pipeline rooms in the UK and 2,000 in Germany.

It has also brought forward its environmental goal of reaching net-zero carbon emissions by 2040, a decade faster than originally planned.

In the year to 25 February, revenue plummeted 71% to £589mln so the firm plunged to a statutory loss before tax of £1bn from a £280mln profit the year before.

Cash at period-end was £1.2bn, after a £1bn rights issue completed last June, with net debt and lease liabilities of £3.2bn.

Performance was severely hit by significant COVID-19 restrictions in the UK and Germany, with hotels and restaurants forced to close for extended periods.

Trading was supported by business rates relief of £117.8mln and furlough scheme of £138.3mln in the UK and £1.5mln for the equivalent in Germany, called Kurzarbeit scheme, alongside other government grants of £10.3mln.

Whitbread said it has “significantly” outperformed the midscale and economy hotel market since reopening in August, with customer scores also remaining “very strong” throughout this period despite the disruption.

It also sped up the growth of the German hotel network and it now has a total open and committed pipeline of 72 hotels as it eyes market share gains.

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