Premier Inn bolsters Whitbread

Premier Inn is seeing strong demand from corporate customers.

Leisure firm Whitbread says sales have increased, with its Premier Inn budget hotel chain doing well as the weak economy hits corporate travel spending.

The firm, which also runs Costa Coffee, said like-for-like sales rose 7% in the 24 weeks to 14 August.

Premier Inn sales were up 10.2% as companies chose the "value for money" chain over pricier rivals.

It said sales had also increased by 3.7% at Costa Coffee and by 4.4% at its pub restaurant business

The group's pub restaurants include Brewers Fayre, Table Table, and Beefeater.

Business travellers

Whitbread's chief executive, Alan Parker, put the firm's ability to defy the gloom afflicting many consumer-focused companies down to its emphasis on value for money.

Whitbread continues to prove that there is still life in the consumer sector Keith Bowman, Hargreaves Lansdown Stockbrokers

"It's a strong corporate market at the moment," Mr Parker told the BBC.

"Business travellers realise that they don't have to pay £150 for a good hotel room."

Around 60% of Premier Inn's customers are business travellers, he said. He added that the strong euro had boosted business from European travellers.

Frugal consumers

Whitbread has opened 14 new Premier Inns this year and 108 Costa outlets since March, including its first stores in Beijing in time for the Olympics.

The housing market slump had allowed Whitbread to snap up cheaper land and property for development, Mr Parker said.

The upbeat trading update boosted Whitbread shares, which were up 1.7%, or 19 pence, at 1140p.

Keith Bowman, an analyst at Hargreave Lansdown Stockbrokers, said that Whitbread was benefitting as cost-conscious consumers wanted to "trade down".

"Whitbread continues to prove that there is still life in the consumer sector, although frugal corporate spending is also playing its part," he said.