(Reuters) – Premier Inn owner Whitbread Plc said on Tuesday it expects weak room revenue growth in Britain for the financial year 2020 as it faces lower demand in its core market.
The company has been hit by increased competition in the crowded budget hotel space from the likes of online services such as Airbnb and OYO Hotels, amidst a tough economic climate and political turmoil prompting Britons to rein in spending.
Whitbread has also been struggling to prop up sales in the UK and has been looking to expand into other geographies to offset the lack of growth.
The company had warned in January that profit would not grow in 2019-20 as it faces an uncertain economic outlook.
The former Costa owner reported a 1.2 percent rise in annual underlying pretax profit to 438 million pounds, boosted by its focus on cutting costs as it continues executing its expansion plans in Germany.
Revenue rose 2.1 percent to 2.05 billion pounds for the 12 months ended Feb. 28, but like-for-like sales growth at its hotels fell to 0.6 percent in Britain from a 2.2 percent growth a year earlier.
Shares of the FTSE 100 company fell 2.7 percent to 4,627 pence in early trading.
(Reporting by Sangameswaran S in Bengaluru; Editing by Shounak Dasgupta)