8 The Sunday Times June 5, 2022
BUSINESS
If Brittain had little experience run-
ning a leisure business before she took
over, she will now be an expert. After the
long period of Covid lockdowns, which
left rooms empty and staff on furlough,
Whitbread and its rivals are now scram-
bling to find staff to cope with a sharp
increase in demand. At the same time,
costs are soaring. Whitbread increased
wages by 10 per cent in the space of six
months and its energy bills have gone up
too, although the company is “quite well
hedged”. And the price of almost every
food item has also risen. “Per ounce,
chicken is now more expensive than
rump steak,” she said. In response, Whit-
bread has simplified its menus — but also
added extras to encourage customers to
spend more.
Later this month, the company will
face investors at its annual meeting, a
year after a shareholder backlash over a
decision to award bonuses to executives
despite receiving government support
during the pandemic.
In April, Whitbread said Brittain had
decided to give up a £729,000 deferred
bonus — concluding it would be inappro-
priate to receive the award in the context
of taxpayer support. Brittain, who is on a
salary of £895,000, said it had been a
“joint decision by the board, remunera-
tion chair and myself ”.
“It didn’t feel like the right thing to do
[taking a bonus] because the business
had been through a difficult period,” she
said. However, Whitbread shareholders
have still been told to vote against the
remuneration report by the proxy
adviser Glass Lewis, while the Invest-
ment Association has issued a red-top
notice. Brittain pointed to a decision to
put the unpaid bonus into a staff welfare
fund. “We found a better purpose for the
money,” she said.A
fter emerging from the pandemic in
one piece, thanks partly to a £1 bil-
lion emergency rights issue in June
2020, Whitbread is now seeking to
expand just as inflation puts busi-
nesses under more pressure.
The consumer prices index climbed
9 per cent in the 12 months to April, up
from 7 per cent in March. “I think we’re in
for a tough few months and probably a
tough couple of years,” said Brittain.
Many people have no recollection of
inflation ever being this high, but she
does, having been, in the early part of her
career, a banker in the 1990s when infla-
tion last rose above 9 per cent. “People
didn’t set prices for very long”, she said,
of the rapidly rising prices in supermar-
kets. For Whitbread, it is an opportunity,
she added: “We’re built to withstand a lot
of stresses. We have an incredibly strong
balance sheet and cash position.”
The early signs are good. In Germany,
occupancy is about 80 per cent, despite
reopening properly only in April. The tar-
get market is locals, rather than interna-
tional travellers, which explains why the
hotels have been designed for Germans —
including larger bar areas for those keen
for a pre-dinner drink or nightcap. “Ger-
man people travel a lot more within their
country than UK people do, both for busi-
ness and travel,” Brittain said.
Structurally, the market is where the
UK was 20 years ago, with 73 per cent of it
belonging to independent hotels. The
budget branded segment, pre-Covid, was
the fastest growing, Brittain added, as
Germans wanted the security of knowing
what they were walking into, rather than
an unknown independent. Now, amid
heightened concerns over cleanliness
after Covid, travellers are eager for the
security of a big chain.
For Whitbread, the next challenge is to
build recognition in Germany. There is
work to be done: on a train from Ham-
burg airport for our interview, a passen-
ger I spoke to hadn’t heard of the brand.
But for Brittain, who has two children
with her husband, Kevin, Premier Inn’s
domination of Germany is unlikely to
happen under her watch. After setting up
the chain for expansion, she is preparing
for her next move, whenever it may be.
Her wish list includes “something inter-
esting”, with “nice people”, where she
can “add value”.
“I’m a bit too energetic to sit in the gar-
den, and I don’t think anybody in my
house would welcome me being home
full time.”T
he rooms in Premier Inn’s
German hotels have a key dif-
ference to those in the UK:
each double bed is fitted with
two piles of bedding. “It’s
very much a German prefer-
ence not to share a duvet,”
said Alison Brittain, chief
executive of parent company
Whitbread, on a tour of one of
the chain’s newest outposts in Hamburg.
Brittain’s mission to entice German
families into her hotels means that the
breakfast looks a little different, too:
bagels, cold meats and cheeses, instead
of a full English breakfast. And the bar,
which stretches across the ground floor,
is a focal point of the hotel.
There are now 40 Premier Inns in Ger-
many, with a further 40 in the pipeline.
Brittain believes the brand, with its Rest
Easy slogan, could grow to a similar size
as in the UK, where it has 820 hotels used
by both families and business travellers.
She has used Germany’s long series of
lockdowns to invest, snapping up packa-
ges of hotels from smaller operators eager
to quit the market. A quick refurbish-
ment, including new bathrooms and fur-
niture, and the hotels have reopened
under the Premier Inn brand.
Brittain, who joined Whitbread as chief
executive in 2015, agreed to a rare inter-
view in Hamburg late last month, where
she explained how Germany held the key
to the group’s future. After years slim-
ming down the business, including the
£3.9 billion sale of Costa Coffee in 2018,
Whitbread is in expansion mode. With
Brittain preparing to bow out of the FTSE
100 giant after seven years, she discussed
how Premier Inn could use Germany as a
base to push into the Netherlands, Switz-
erland and Austria.
Rapid expansion — after two years in
which Whitbread has endured Covid lock-
downs, staff shortages and sharp rises in
the costs of staff, food and energy — may
seem a gamble too far. But Brittain
believes Premier Inn occupies a sweet
spot — that leisure travellers will now opt
for shorter, domestic trips instead of
expensive holidays abroad, while busi-
nesses will choose to stay in a Premier Inn
rather than a more upmarket rival.
“Historically, when things have been
difficult, Premier Inn has done well,
because instead of going to a Malmaison,
you actually could stay at Premier instead
as it would be much better value for
money,” she said. At the same time, while
families are cutting back on luxuries such
as holidays abroad, they might do smaller
trips instead — perhaps to the theatre or
visiting family. The signs are good: rooms
in the local Premier Inn for this year’s
Cheltenham Festival sold out in 48 hours.B
rittain’s optimism for Premier Inn’s
growth opportunities is not yet
reflected in Whitbread’s share
price, which has drifted 13 per cent
since the start of the year, closing
last week at £27.20 to give it a valuation of
£5.5 billion. There is also continued spec-
ulation that Whitbread could be a bid tar-
get, with Premier Inn likely to be a good fit
for larger rivals such as InterContinental
or Starwood, which owns hotel brands St
Regis, Sheraton and Westin.
Brittain herself is also understood to be
looking over the horizon at retirement
after this newspaper revealed that head-
hunters from Spencer Stuart are working
with the company on plans for succes-
sion. But over a lunch of open sandwiches
in Hamburg, Brittain insisted she was cur-
rently “not going anywhere”.
“It’s perfectly obvious to anyone that
[the subject will crop up] after seven
years in the role and at my great old age,”
said Brittain, 57. “At some stage — at a
point which suits both me and Whitbread
— of course I will retire. But you know, it is
still to be determined when that will be.”
Since taking over, she has reshaped
Whitbread. Apart from the sale of Costa
to Coca-Cola in 2018, she bought a 49 perSABAH
MEDDINGS
Hamburg
cent stake in the Pure sandwich chain,
which has 19 shops across London. She
has also been targeted by two activists:
the investor Sachem Head and the New
York hedge fund Elliott Management,
which demanded Whitbread split itself in
two. Although Elliott claimed victory
when, just weeks after its stake emerged,
Whitbread said it would sell Costa, Brit-
tain said plans were already afoot to
break the business in half.
“Anybody who knows how you run a
business knows you can’t make a deci-
sion of that magnitude in three weeks and
without a substantial amount of plan-
ning,” she said. “Those sorts of board
decisions take many, many months to
come to fruition.”
Whitbread has been many things since
it was founded as a brewery by Samuel
Whitbread in 1742. It listed on the London
market in 1948 and called time on brew-
ing 20 years ago, when it sold its beer
operations to Interbrew for £400 million.
Over the years, it has bought and sold
businesses including Britvic, the soft
drinks firm, which was demerged in
2005, and has owned businesses includ-
ing David Lloyd gyms and the Café Rouge
and Bella Pasta restaurant chains.
Today, it has 870 hotels across the UK,
Germany and the Middle East and
employs 38,000 people. The year before
Covid, it reported revenues of £2.1 billion,
and in January it said sales in the three
months to November 25 were 5.5
per cent ahead of the same
period in 2019.
Brittain joined Whitbread
after a career in banking,
most recently as head of
the retail bank at Lloyds.
She was not the obvious
choice to take over a hotel
and pub group, with retail
analyst Nick Bubb calling
her the “rank outsider”.
However, Brittain said
proudly that her first job
was as a waitress at the Gam-
esley House restaurant in Glos-
sop, Derbyshire, near where she
grew up. “I don’t want to brag, but it
was silver service,” she joked.ROOM
SERVICE
WHITBREAD FACTS:
6 The first Premier
Inn was opened as
Travel Inn in 1987.
6 The first hotel in
Germany was
opened in
November 2020,
in Hamburg.
6 In Germany, it
sells more than
150,000 pretzels
each year and
575,200 sausages.
6 Whitbread
employs 38,000
people, of whom
1,000 are in
Germany.
6 In the UK, it
serves 21 million
breakfasts each
year.
6 80,000 — the
number of rooms
that Premier Inn
has in its hotels.The bonus didn’t
feel like the right
thing to do after
the pandemic
Whitbread
boss is not
yet ready
to rest easy
Chief executive Alison Brittain explains
why a hotel chain ravaged by Covid is
now expanding rapidly in Germany
Alison Brittain has
had to make some
changes for the
German market at
Premier Inn,
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