Whitbread is to sell off the freehold rights to a raft of its Premier Inn hotels in a £1.5bn deal as it pivots to a capital-light business model designed to win back flighty investors. The FTSE 100 firm said the measures, as part of its new five year plan, were
Felix Armstrong
Thursday 30 April 2026 7:12 am | Updated: Thursday 30 April 2026 7:46 am
Whitbread is to sell off the freehold rights to a raft of its Premier Inn hotels in a £1.5bn deal as it pivots to a capital-light business model designed to win back flighty investors.
The FTSE 100 firm said the measures, as part of its new five year plan, were taken in response to the “unexpected” impact of business rates, as the Budget sent tax bills soaring for thousands of hospitality companies.
The hotel sell-off will be matched with an overhaul of the company’s restaurants, which will see it sell more than 100 sites and cut nearly 4,000 jobs.
Whitbread has accelerated cost cutting in recent months as it attempts to minimise the impact of the business rate changes at last year’s Budget.
Chief executive Dominic Paul said on Thursday: “In light of significant cost increases in the form of business rates and National Insurance, as well as the implied market discount to our inherent value, we’ve looked hard at the options open to us.”
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Whitbread’s new plan will also see it cut capital spending by £1bn, in the hopes of having £2bn of cash flow available for shareholders by 2031.
The company saw flat revenue in the year to February 2026, at £2.9bn, but pre-tax profit fell by 19 per cent to £298m.
Premier Inn saw a 1.9 per cent growth in accommodation sales but the group’s food and drink businesses saw sales fall by four per cent.
In the results of its business review, Whitbread said it has already agreed the sale of 51 restaurants for £50m and will offload 60 more.
The cost-cutting plan, subject to employee consultation, will result in around 3,800 jobs being lost.
The group expects its food and drink sales to fall by as much as £160m next year as it aims only to run restaurants which are integrated with its hotels.
Iran war warning
Whitbread said it will take a £5m hit from the impact of the war in the Middle East on its hotels in the region.
Read more Whitbread hopes to win back investors with £1.5bn property sell-off
The group said surging energy prices caused by the Iran war could “feed into sustained inflation in goods, utilities and transport-related inputs that materially affect the hospitality sector”.
The company said it is “closely” monitoring the safety of its staff in the Middle East.
The firm was widely expected to confirm the freehold self-off, as it aims to woo investors back by shedding assets.
Sell and leaseback is a method by which firms can secure a short-term cash injection, by losing ownership of their property but agreeing to lease the premises.
While this trick offers a quick cash boost, it can leave companies more exposed to economic headwinds if they are hit with rent hikes.
Whitbread hits out at business rates
Whitbread announced a previous five year plan in October 2024, but opted to undergo a new business review in response to “higher than expected cost inflation and significant increases to business rates”.
The Premier Inn owner has been scathing over the tax burden facing hospitality, saying last year it was “extremely disappointed” by the Treasury’s changes to business rates.
The government later offered a £300m business rates support package to pubs, but excluded hotels and restaurants from relief from the higher rates, which came into force this month.
Whitbread began life as a brewery in the 18th century and has been listed in London since 1948.
The firm’s shares closed at 2,383 on Wednesday, down six per cent in the year so far.
The group said its market value is at a “significant discount to the inherent value of our business”.
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