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UK travel and leisure firms gets summer travel boost
Global Banking & Finance Review®
Company
By Sinchita Mitra and Amna Karimi
(Reuters) -British retailer WH Smith and hotel group Whitbread are seeing business return to pre-pandemic levels, with pent-up demand for summer vacations boosting the leisure industry’s recovery from the COVID-19 crisis.
WH Smith, which has shops at airports and railway stations, said on Wednesday its revenue in the third quarter surpassed pre-pandemic levels for the first time and it expected its full-year performance to be at the higher end of market expectations.
Whitbread on Wednesday said hotel stays were above pre-crisis levels and said its Premier Inn brand in Britain was about 40% booked for the second quarter, giving it confidence that it would stay ahead of the market for the rest of the year.
Shares in FTSE 100-listed Whitbread were up nearly 4% and midcap WH Smith climbed nearly 6% by 0811 GMT.
The global hospitality industry is seeing a rush for “revenge travel” – a term trending on social media that refers to the scramble to book overseas trips that were delayed by coronavirus restrictions.
As more people resume travel and plan vacations, retailers and consumer product companies including U.S. discount chain Target and cosmetics maker Coty are benefiting from a jump in luggage sales and increased spending at airports.
“Premier Inn owner Whitbread are fully capitalising on a consumer that’s getting back out and about despite a cost-of-living crisis,” said Hargreaves Lansdown analyst Matt Britzman.
“That’s testament to the Premier Inn brand and a price point that’s accessible to consumers in tough conditions.”
WH Smith, which sells everything from books and sandwiches to Bluetooth headphones, said trading at its British airports were particularly strong, with British air revenue at 114% compared to 2019 levels, in the 15 weeks to June 11.
Britain is battling the worst cost-of-living squeeze in three decades as inflation hits levels not seen in 40 years.
Whitbread warned costs would be higher by about 20 to 30 million pounds ($36 million) as it aimed to increase pay for some staff to retain them amid tight labour supply and increasing demand.
Retailer WH Smith had previously said it would raise prices of some products this year to deal with higher shipping costs and inflation.
($1 = 0.8288 pounds)
(Reporting by Sinchita Mitra and Amna Karimi in Bengaluru; Editing by Shounak Dasgupta and Edmund Blair)
'Revenge travel' refers to the surge in travel bookings as people seek to make up for trips missed during the COVID-19 pandemic. It reflects a strong desire to travel after restrictions are lifted.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is often measured by the Consumer Price Index (CPI).
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