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Finance

Premier Inn owner Whitbread shares tumble as profit drops and Germany outlook dims

Published by Global Banking and Finance Review

Posted on October 16, 2025

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(Reuters) -UK Premier Inn owner Whitbread reported a 7% drop in half-year profit on lower food and beverage sales and lowered profit expectations for its German business after weaker-than-expected demand, sending its shares down as much as 9%.

The hotel operator said the UK market returned to growth in the second quarter, driven by leisure demand helped by events and favourable weather, though weak food sales and higher inflation and lease costs ate into its bottom line.

Shares in the FTSE 100 company were last down 8% at 2,958 pence, heading for their worst day since November 2021.

Softer demand in Germany at the start of September meant that it now expects adjusted pretax profit for the year of up to 5 million pounds ($7 million) for its second-largest market, compared with the 5 million to 10 million pounds it expected previously.

"Whitbread's first half performance is underwhelming, with revenue and profits slipping below last year's levels despite a favourable summer and enduring appeal of its value-led Premier Inn brand," analysts at Begbies Traynor said.

Whitbread’s results also reflect the short-term impact of its turnaround strategy of converting underperforming restaurants into hotel rooms. This comes as competitors like Travelodge grow their UK presence, while Whitbread continues to expand in Germany’s competitive hotel market.

The company said forward bookings in the UK and Germany are ahead of last year as demand has picked up in recent weeks, supporting its confidence in the full-year outlook despite uncertainty ahead of the UK budget.

Whitbread operates more than 97,000 rooms across the UK and Germany, making Premier Inn the largest hotel brand in Britain.

The company posted an adjusted pretax profit of 316 million pounds for the six months ended August 28, compared with 340 million pounds a year earlier.

($1 = 0.7450 pounds)

(Reporting by Ankita Bora in Bengaluru; Writing by Yadarisa Shabong; Editing by Sumana Nandy and Emelia Sithole-Matarise)