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CoronavirusTestingHospitalityLatest NewsJob creation and losses

Whitbread job cuts smaller than anticipated

by Adam McCulloch 14 Jan 2021
by Adam McCulloch 14 Jan 2021 Photo: Shutterstock
Photo: Shutterstock

Whitbread, which owns Premier Inn, has cut 1,500 restaurant and hotel jobs, far fewer than the 6,000 first projected by the group.

The FTSE 100-listed owner of the Beefeater and Brewers Fayre chains said it had managed to achieve targeted cost savings because employees accepted a cut in maximum contracted hours.

It has furloughed about 27,000 of its 35,000 UK staff and scrapped its shareholder dividend. The firm operates 1,200 hotels and restaurants in the UK.

Its third-quarter results showed that sales at its UK Premier Inn establishments fell by more than half as the pandemic almost put an end to business travel and demand in big cities.

In September 2020 the company had forecast 6,000 job losses although went on to issue a more positive assessment in November, partly because of the pick-up in tourism and business demand during the summer, particularly in regional hotels. Also, Whitbread’s expanded German operations had produced a growth in sales.

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Sales, however, started to fall off in October and declined sharply from November as Wales announced a fortnight-long circuit break and England went into a second national lockdown. Hotel stays also plunged by two-thirds in the last five weeks of 2020. Only about a quarter of rooms in Whitbread’s 800 UK hotels were occupied in November.

Chief executive officer Alison Brittain said: “We expect the current travel restrictions in the UK and Germany to remain until, at the very least, the end of our financial year. With the vaccination programme under way, we look forward to the potential gradual relaxation of restrictions from the spring.”

She said the lower number of job cuts was in part made possible because so many staff agreed to cut hours and called on the government to extend the rates and VAT relief measures beyond 31 March.

In December, Whitbread called on landlords to halve its rent bill for three months after burning through cash as thousands of rooms sit empty as bookings fell to about half of levels last year.

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Two-thirds of its UK hotels are open, but public guidelines state you can only stay in hotels if you are a key worker, self-isolating, moving house, or would become homeless should the accommodation close.These restrictions have caused massive financial damage to the hospitality sector. The Office for National Statistics business insights survey published 7 January found that half of hotel and food service firms did not have at least three months’ worth of cash reserves.

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Adam McCulloch

Adam McCulloch first worked for Personnel Today magazine in the early 1990s as a sub editor. He rejoined Personnel Today as a writer in 2017, covering all aspects of HR but with a special interest in diversity, social mobility and industrial relations. He has ventured beyond the HR realm to work as a freelance writer and production editor in sectors including travel (The Guardian), aviation (Flight International), agriculture (Farmers' Weekly), music (Jazzwise), theatre (The Stage) and social work (Community Care). He is also the author of KentWalksNearLondon. Adam first became interested in industrial relations after witnessing an exchange between Arthur Scargill and National Coal Board chairman Ian McGregor in 1984, while working as a temp in facilities at the NCB, carrying extra chairs into a conference room!

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