Whitbread May Cut 250 Head Office Roles as CCP Virus Impacts Revenue

July 23, 2020 Updated: July 23, 2020

Whitbread, the UK’s largest hospitality company, may cut around 250 head office roles as part of a proposed restructuring, the Premier Inn-owner said on Wednesday, as it navigates through the CCP virus crisis that had earlier shut all of its hotels.

“Whilst we’re delighted to re-open our doors, we are acutely aware that demand and revenue remain reduced. We anticipate this will be the case for some time to come,” a company spokeswoman told Reuters.

The company who, until 2019 owned Costa Coffee, also owns big brands Beefeater and Brewer’s Fayre, as well as the Hub by Premier Inn, which provides compact, low-cost accommodation across London and Edinburgh and promotes becoming the world’s best budget hotel as its corporate ambition.

Whitbread have suffered greatly, along with their travel and leisure business counterparts, who are still being dealt a hefty blow by the CCP (Chinese Communist Party) virus.

Lost Revenue

Billions of pounds in lost revenue for the sector has resulted from widespread travel restrictions imposed across countries in response to the pandemic.

Whitbread, which has around 1,300 head office employees, said that some of the proposed job losses will be offset with the creation of around 75 new roles and that final numbers will be confirmed in September.

As well as taking advantage of government support during the CCP virus crisis, the company raised £1 billion ($1.27 billion) when it invited existing shareholders to buy additional shareholder securities or “rights,” which give the purchaser the right to buy new shares at a discounted rate on a stated date in the future.

Household Name

Whitbread is a household name and one of the UK’s oldest companies. It was founded by Samuel Whitbread in 1742. He became a Brewer’s apprentice at the age of 16 in 1736, and a brewery founder in 1742 at the age of 20. He went on to pioneer new brewing techniques. By 1750 his operation was mass-producing ale in purpose-built premises in London where, in 1784, an early steam engine designed by Georgian engineer James Watt operated.

Cookhouse and Pub
File photo of a Cookhouse and Pub bar, a brand owned by Whitbread. Revenue in bars and restaurants has declined significantly due to the CCP virus pandemic. (Whitbread)

The company, which has in recent years bought and sold many big brands, including David Lloyd, Marriott Hotels, TGI Fridays, and Pizza Hut, finally sold it breweries in 2001 and grew its restaurant and hotels business.

The 278-year-old company said on Wednesday it had no income while its hotels and restaurants were in hibernation, which has had a considerable effect on its cash flow.

Re-opening

Earlier this month, the company said it had opened more than 270 hotels and 24 restaurants of its more than 1,200 Premier Inn hotels and pubs across the UK. It has also opened all of its hotels in Germany.

“Throughout the crisis we operated 39 UK hotels to provide accommodation for NHS staff and other key workers. This experience of successfully and safely operating hotels in a socially distanced environment provided key learnings and will enable us to deliver the highest standards to our customers as we reopen the rest of the estate,” Alison Brittain, Whitbread chief executive officer, said in a July trading update.

Whitbread also reported an 80 percent fall in first-quarter like-for-like UK sales growth.

While recovery would be slow in the post-CCP virus climate, due to their multiple brand model and healthy pre-virus balance sheet, there was enough financial resilience in the business to weather the COVID storm, the company’s 2019–20 annual report stated.

Reuters contributed to this report.