Premier Inn Turns to High-Margin Rooms to Offset UK Hotel Weakness

Premier Inn says it's outperforming rivals in a soft UK market, but it's doing so by squeezing more value from fewer guests, not a rebound in demand.

Premier Inn-owner Whitbread reported a drop in UK accommodation sales in its fiscal first quarter and is trying to offset weaker demand by charging guests for room upgrades and add-ons.

UK accommodation revenue declined 2% for the period that ended May 29. RevPAR also fell 2%, while occupancy dropped to 78.6%, down more than 3 points from last year.

Trading "was against a softer demand backdrop," Whitbread CEO Dominic Paul said on the company's earnings call Thursday.

1. Upselling to lift spend per guest: With fewer bookings, Premier Inn is tryi