Whitbread encouraged by Marriott performance

Further evidence of a recovery in the UK hotels sector emerged today after Whitbread said its Marriott business had returned to growth.

The leisure group said like-for-like sales at its 62 Marriott hotels grew by 6% in the 13 weeks to June 3, after falling over the previous 12 months.

The improvement follows a tough year for operators of four-star hotels with a slowdown in international and business travel due to Sars and the Iraq war.

Whitbread, which owns the rights to the hotels in the UK, last month announced it was ready to sell 11 of the hotels – those branded Courtyard by Marriott.

The move to offload the three-star properties is part of a focus by Whitbread on its upmarket hotels and budget Travel Inn brand, which has improved sales by 5.9% since the start of the new financial year.

At the company’s annual meeting, chief executive David Thomas described like-for-like sales growth of 3.4% across all its brands as “encouraging”.

The performance of the 302 Travel Inn hotels reflected the brand’s increasing consumer appeal, he said.

The importance of the budget sector to Whitbread was underlined by its interest in the Premier Lodge hotel chain owned by Spirit Group, thought to be worth around £500m (€753.7m).

According to reports, Whitbread has just one rival in the auction of the chain but executives have so far declined to confirm making a formal bid.

In addition to its hotels, Whitbread owns 56 David Lloyd leisure clubs and 587 pub restaurants trading under the Brewers Fayre, Brewsters and Beefeater brands.

It also has a high street restaurants division that includes 41 outlets of TGI Friday’s, 578 Pizza Hut branches and 346 Costa Coffee bars.

Mr Thomas said trading at all the group’s brands had been sound, adding that he took heart from the recent performance of Marriott.

“Marriott is now achieving healthy growth although in this quarter it has benefited from comparison with the depressed London market of a year ago,” he said.