The owner of Premier Inn, Whitbread, is witnessing a "growth problem in the UK" according to analysts, as like-for-like (LFL) sales in its accommodation sector dropped by 3% in Q3.

The firm, which owns hotel and hospitality brands including hub by Premier Inn, Beefeater and Brewers Fayre, also saw its LFL sales in the food and beverage sector drop by 1% in the 13 weeks to 28 November.

In the year-to-date, Whitbread’s UK accommodation and food and beverage sectors saw LFL sales drop by 2%.

Despite these falls, the firm said its total UK accommodation sales were “in line with last year” and that the expected reduction in its UK food and beverage sales were a result of its "accelerating growth plan".

However, the firm’s German sector saw a strong performance in Q3, with accommodation and food and beverage LFL sales increasing by 19% and 21%, respectively.

Chief executive officer at Whitbread, Dominic Paul, said: "Our five-year plan is set to deliver incremental profit of at least £300m by FY30 and release more than £2bn for shareholders through a combination of dividends and share buy-backs.

"The structural shift in UK supply has meant that Premier Inn is continuing to sustain the significant gains made since the pandemic. Whilst forward visibility remains limited, the favourable supply backdrop, together with our brand strength and commercial initiatives, means we are confident that we can continue to outperform the market."

Looking ahead, the firm said it had not changed its guidance for the full financial year.

Going into the 2026 financial year, it said it was "making good progress against its strategic priorities", but that due to the impact of the Budget, the firm expects gross UK cost inflation to be around 5% and 6% on its £1.7bn cost base.

Investment director at AJ Bell, Russ Mould, concluded: "Premier Inn has a growth problem in the UK. Once again, the hotel chain’s owner Whitbread says its homeland operations are treading water and the business is not making solid progress with growing LFL sales.

"In its defence, Whitbread has done a fantastic job planting flags across the UK and ensuring there is a Premier Inn in every major town and city. The brand remains one of the strongest in its field and it is a favourite among domestic and foreign tourists. People travelling on business are also happy to spend a night in its hotels.

"Strategically, Whitbread has achieved a lot and its expansion into Germany is going well. However, something needs to change to get the UK operations moving faster again. It’s precisely moments like this one that a company may be tempted to make acquisitions to accelerate growth. If it cannot achieve solid organic growth in the UK, Whitbread might need to get creative, but acquisitions don’t always pay off."

---