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Last Updated: Friday, 21 April 2006, 16:44 GMT 17:44 UK
Whitbread sells Marriott hotels
Premier Travel Inn
Whitbread will now turn its focus to its budget hotels
Leisure giant Whitbread has quit the luxury hotels business with the sale of its Marriott hotels in a deal worth almost 1bn.

The 46 hotels - part of a joint venture set up with Marriott International last year - have been sold to Royal Bank for Scotland for 951.4m ($1.7bn).

Whitbread will receive 237m for its share of the sale.

The deal will allow Whitbread to pay an extra 400m to investors, on top of a 400m special dividend agreed in 2005.

Whitbread had long been expected to quit the four-star hotels business to concentrate on its more lucrative budget hotels.

In the 50 weeks to February, like-for-like sales at the group's Premier Travel Inn business increased by almost 7%.

That was in sharp contrast to struggling sales at the firm's restaurants and pubs divisions - which include TGI Fridays and Pizza Hut - which have both been struggling in a tough market.

Shake-up

The disposal of the Marriott hotels is part of Whitbread's efforts to restructure the group.

Last year, the group said it was setting up a joint venture with Marriott International - the US owner of the brand - which would hold onto the 46 UK hotels until they were sold.

It received an initial payment of 710m under the agreement - 400m of which was earmarked to be returned to shareholders while 100m went towards cutting its pensions deficit, and the rest was used to cut its debts.

Marriott International is expected to continue to operate the hotels under an agreement with Royal Bank of Scotland. following the sale.


SEE ALSO:
Sales at Whitbread under pressure
15 Dec 05 |  Business
Whitbread profits up but jobs go
25 Oct 05 |  Business
Whitbread pubs lack sales cheer
14 Jun 05 |  Business
Whitbread confirms Marriott sale
14 Mar 05 |  Business
Whitbread cautious as sales dip
26 Apr 05 |  Business
Whitbread in Marriott sale talks
11 Mar 05 |  Business


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