WHITBREAD hailed the success of its marketing strategy today after a surge in demand for weekend breaks boosted its Premier Inn hotels chain.
The leisure group, which also owns Beefeater and Brewers Fayre restaurants and the coffee chain Costa, claimed a significant increase in Premier’s market share after like-for-like sales rose 10.5% in the 13 weeks to June 3.
It said the chain’s outperformance was driven by increased marketing, including an advertising campaign fronted by comedian Lenny Henry, and the impact of "dynamic pricing" where rooms are priced according to demand.
In a competitive marketplace, rival Travelodge recently launched its own ad campaign featuring soft toys Mr Sleep and the Zzz Squad.
Premier said rooms costing from £29 for leisure guests had generated a significant increase in weekend occupancy, while business account sales revenue grew 21% to more than £50 million.
Whitbread’s pub restaurants, which are often situated alongside its Premier Inn hotels, grew like-for-like sales by 3.6% in the same period.
The company added that its Costa business delivered "another outstanding performance", with like-for-like sales up by 8.5%.
Whitbread shares jumped 4% following the stronger than expected start to the company’s new financial year.
Chief executive Alan Parker said: "Last year, we acted promptly to increase market share, reduce costs and conserve cash. The positive momentum generated by these decisive actions has continued into 2010/11.
"However, we are aware that comparables get more challenging as the year progresses and we are not planning on the consumer climate becoming any easier."
Whitbread said Premier Inn opened four new hotels with a total of 380 rooms in the quarter, part of 2,500 new rooms due to open in the financial year.
Mr Parker, who is due to retire in November after 18 years with the firm, said longer term expansion will continue at a "pace appropriate to our competitive performance and growth in the market".
He added: "Whitbread has performed well in recession and is strongly placed for any recovery."
While like-for-like sales across the group were 7.6% higher in the quarter, analysts said it was too early in the year to revise profits guidance.
Numis Securities maintained its top-of-the-range forecast of £256.8 million, compared with the £223.6 million reported a year earlier.
Whitbread employs 34,000 people and has 2,000 outlets in the UK. EasyJet chief executive and former RAC boss Andy Harrison has already been named as successor to Mr Parker.