Whitbread has seen its group sales increase by 1% year-on-year to £739m in the first quarter of its financial year, as it continues to strengthen in the post-COVID era.

In the UK, the firm which owns the Premier Inn and Brewers Fayre brands said that its accommodation sales were in line with last year, while jumping 55% compared to the same period in the 2020 financial year.

In Germany, accommodation sales also increased by 15%, which it said was led by the increasing maturity of its estate and continued room growth.

Chief executive at Whitbread, Dominic Paul, said: "Our UK trading results strengthened during the quarter and we continued to grow accommodation sales ahead of the market. Underpinned by the favourable supply backdrop, total accommodation sales and RevPAR remained significantly ahead of pre-pandemic levels. Our cohort of more established hotels is continuing to outperform the M&E market and we remain on course to achieve the important milestone of reaching break-even on a run-rate basis during the second half of 2024.

"Whilst the normal booking pattern means our forward visibility remains limited, our forward booked position is positive and we remain confident in the full year outlook. This reflects a more encouraging trading performance in the UK, our strong commercial programme and increased cost efficiencies, as well as good progress in Germany.”

As part of the firm’s growth going forward, it said that it is on track to add 3,500 rooms to its UK pipeline, adding that it will increase its momentum to deliver long-term profitable growth.

Furthermore, Whitbread said that it is on track to deliver its £150m share buyback scheme, with 3.2 million shares purchased for £96m.

For the rest of the year, the firm said that it remains confident in its full year outlook, with UK trading being "more encouraging" as Whitbread moves towards its peak periods of the year, with its forward position remaining positive.

Head of markets at interactive investor, Richard Hunter, added: "Whitbread may not have fully recovered from the ravages wrought by the pandemic, but progress is continuing apace as the group continues to build on its position as the UK’s largest hotel chain.

"Challenges inevitably remain, not least of which is the fact that heightened borrowing costs and pressure on disposable customer incomes are real headwinds, both in the UK and Germany. In addition, while the shares are now 44% higher than when COVID first hit, they remain down by 29% to the level just prior to the pandemic.

"More recently, question marks on the consumer capacity to spend have been overhanging the sector as a whole, and Whitbread is no exception. Over the last year, the shares have fallen by 16%, as compared to a gain of 6.5% for the wider FTSE100, with most of that weakness coming over the last six months. Even so, the market consensus of the shares as a buy is also an indication that investors have bought into a story which could have much further to run, especially if growth in Germany comes through as is hoped."

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