Whitbread (LON:WTB) management struck an upbeat tone on its FY26 third-quarter trading update call, citing strengthening demand trends in both the UK and Germany and a larger-than-expected contribution from its ongoing efficiency program. CEO Dominic Paul, joined by CFO Hemant Patel, said trading momentum seen earlier in the year continued through the quarter and has improved further into the current period.
In the UK, Whitbread reported continued market improvement, with occupancy remaining high at 83% and RevPAR up 3% in the third quarter. Paul said the company maintained a “healthy premium” versus the rest of the mid-scale and economy market.
London was highlighted as a key driver, where Whitbread increased both occupancy and rates, producing RevPAR growth of 7% year over year. Responding to a question on whether London’s performance was “lumpy,” Paul said it was “consistently strong” through the quarter and reiterated confidence in London as a market where the group is expanding capacity.
Paul also addressed questions about occupancy being slightly down year over year despite RevPAR growth. He said occupancy in the current trading period was “very, very close” to the prior year, emphasizing Whitbread’s focus on optimizing “every single room, every single night,” with some hotels outperforming last year on occupancy while others were slightly lower.
Looking at the early part of the fourth quarter, Whitbread said UK performance strengthened versus Q3. In the six weeks to 8 January 2026, total accommodation sales and RevPAR were both up 4%, and the company said it outperformed the wider market. Paul attributed the outperformance to a combination of product consistency, brand strength, location quality, and active revenue management. He also pointed to progress in CRM and data usage, noting that the majority of customers book directly.
Management said UK food and beverage sales were in line with expectations as Whitbread continues to execute its accelerating growth plan. Paul framed the effort as both a guest experience initiative and a returns improvement program, focused on transforming some lower-returning branded restaurants into higher-returning hotel extensions.
Whitbread said its German business delivered a strong quarter and remains on track to reach profitability this year. In Q3, total accommodation sales rose 12% and RevPAR increased 7% in local currency, which management attributed to the increasing maturity of the estate and brand alongside commercial initiatives.
Momentum also carried into the current period. Over the first six weeks of the quarter, Whitbread reported total accommodation sales up 11% year over year and total estate RevPAR up 5% to EUR 56. More established hotels performed ahead of the broader German portfolio, with RevPAR of EUR 66, up 8%.
On costs, management said the group’s efficiency program is running ahead of prior expectations. Whitbread increased its expected FY26 savings by GBP 10 million to a range of GBP 75 million to GBP 80 million. Patel later confirmed the incremental savings are “all cash” and represent “real P&L money.” He described the program as comprising many initiatives across the cost base, including labor, procurement, and technology, and stressed it is focused on “real efficiencies” rather than simply cutting investment.
Patel provided an example from food and beverage supply, where Whitbread moved from a site-by-site and warehouse model to a wholesale model, which he said reduced procurement costs and improved delivery efficiency through a shared network. Management also referenced technology investment—including prior examples such as robot vacuum cleaners—and said future opportunities are expected from AI applications such as improved labor scheduling and forecasting.
For FY27, Whitbread maintained its underlying inflation assumptions but reduced its estimate of the cost impact from UK business rates after receiving clarification on transitional relief mechanics affecting more than 1,000 properties. The company now expects a circa GBP 35 million impact in FY27, down from a preliminary estimate of GBP 40 million to GBP 50 million. Paul called the proposed business rates changes “punitive” and said Whitbread and the broader hospitality industry are pressing the UK government for changes, noting an ongoing consultation process due to finish in mid-February.
Taking account of GBP 60 million of efficiency savings expected next year, Whitbread said it now forecasts net inflation in FY27 of 3% to 4%. Management said it plans to provide more detail on mitigation and the broader five-year plan at full-year results in April, including views on phasing beyond FY27. Patel noted the company also expects to challenge valuations from April onward, though the timing and extent of any rebates are uncertain.
During Q&A, management discussed a transaction with LondonMetric as part of its capital recycling program. Paul said Whitbread had guided at the start of the year to GBP 253 million of disposal proceeds for the full year, including sale-and-leasebacks and other disposals, and stated the company remains on track. The LondonMetric deal was described as GBP 89 million across nine sites at a net initial yield of 5.3%, spanning both regional and London locations.
Paul said such deals take time and did not happen overnight, and while business rates changes can have a “small impact” on sale-and-leaseback pricing, he said it was not significant in this case. He reiterated that the proceeds are intended to support investment in higher-return projects, including the accelerating growth program, which he said generates “high teens” returns on capital.
Management also reiterated it is reviewing a range of options to drive profits, margins, and returns and will update the market on its five-year plan at the full-year results in April. Paul said the board regularly reviews strategic options and cited past structural decisions—such as separating and selling Costa Coffee and announcing the accelerating growth plan—as examples of the company’s willingness to make significant changes when appropriate. He added that shareholder views will be considered as part of the current review.
On FY26 expectations, Patel said the additional GBP 10 million of efficiency savings should flow to the bottom line, and that continued trading strength could represent potential upside versus previous forecasts depending on RevPAR assumptions, while reiterating that Whitbread does not guide on RevPAR.
Looking ahead, Paul said UK forward visibility remains limited but that the booked position for FY27 is building and is ahead of last year, with positive long-lead leisure bookings into peak periods. In Germany, he said Whitbread continues to perform ahead of the market and remains on course to reach profitability.
Whitbread is the owner of Premier Inn, the UK’s biggest hotel brand, with 86,000 rooms in over 850 hotels and a growing presence in Germany with 10,500 rooms in 59 hotels, offering quality accommodation at affordable prices in great locations. People are at the heart of our business. We employ over 38,000 team members in over 900 Premier Inn hotels across the UK and Germany.
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