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LONDON - Premier Inn owner Whitbread PLC said on Friday it expects to face a financial impact of between £40 million and £50 million in fiscal year 2027 due to significant increases in business rates following this week’s UK government budget.
The hospitality company reported that its UK operations continue to show positive RevPAR (revenue per available room) growth in the third quarter, with forward bookings ahead of last year. In Germany, Whitbread noted that market demand has improved since the second quarter, supported by a strong events calendar.
Despite the anticipated cost pressures, Whitbread maintained its financial guidance for fiscal year 2026, which ends in February 2026.
The company now forecasts gross UK cost inflation, including the business rates increase, to be between 7% and 8% on its £1.7 billion UK cost base for FY27. To counter these pressures, Whitbread plans to implement accelerated cost efficiencies of £60 million, which it expects will reduce net UK cost inflation to between 3.5% and 4.5%.
"We are extremely disappointed with the outcome of this week’s UK Budget which will have a significant impact on our business and the wider hospitality industry," said Dominic Paul, Whitbread Chief Executive, in the press release statement.
Paul added that the company has "a strong track record of responding to inflationary headwinds" and would be "exploring a variety of options in order to further drive profits, margins and returns."
Whitbread is scheduled to release its third-quarter trading update on January 13, 2026.
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