Premier Inn owner Whitbread asks landlords to slash rent bill in half as thousands of rooms sit empty
Hospitality group to pay 50 per cent of rent for the final quarter of 2020
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Your support makes all the difference.The UK’s largest hotel and restaurant group has asked landlords to slash its rent bill in half as its struggles with the impact of the pandemic.
FTSE 100-listed Whitbread, which owns brands including Premier Inn and Beefeater, called for the three-month reduction after haemorrhaging cash as thousands of rooms sit empty.
Just a quarter of rooms in Whitbread’s 800 hotels were occupied in November. The group has scrapped its shareholder dividend, furloughed 27,000 staff and warned it could cut 6,000 jobs.
Unlike many of its peers, Whitbread has, until now, paid its rent in full since the pandemic began.
However, landlords are likely to resist attempts to push for a rent reduction from the company, which is valued at £6bn. Commercial property owners have missed out on an estimated £4.5bn this year as tenants have withheld payments.
Much of that debt is thought to be unlikely to be recovered, leaving landlords sitting on big losses.
Last month West End landlord Shaftesbury swung to a £700m loss after the value of its retail and hospitality property plunged by 18.3 per cent in a year.
A Whitbread spokesperson said that since the start of the pandemic the business “has taken decisive action to ensure that our cost base reflects the low levels of demand”.
The company added: “Throughout the pandemic to date, we have paid our rent commitments in full, even when our hotels and restaurants were forced to close.
“With ongoing government restrictions expected to result in subdued market demand into the first half of 2021, we are now asking our landlords to support us, as other stakeholders have during the pandemic, through a reduction in rent for the December quarter in recognition of the current environment."
In a letter to landlords, first reported by property news website Costar, Whitbread said it intended to pay half its quarterly rent bill which is due on Christmas Day.
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