Whitbread strengthens German market presence with purchase of 19 hotels

Mar 07, 2018

The deal will give Whitbread’s Premier Inn brand a “substantial” presence in the German hotel market, increasing to 31 hotels with more than 5,700 rooms in 15 key cities by the end of 2020.

  • Pictured: Whitbread chief executive Alison Brittain.

It is an important step in accelerating Whitbread’s existing international strategy and in replicating Premier Inn UK’s success and network scale in what the Dunstable-based plc sees as a key strategic market.

Whitbread will continue to explore options to further accelerate growth in Germany, through a mix of freehold property developments, leasehold sites and acquisitions of small existing hotel portfolios.

Whitbread chief executive Alison Brittain said: “One of our three key strategic priorities is to focus on building strong and sustainable growth in key international markets.

"We believe Germany has many of the structural growth drivers that have underpinned the success of Premier Inn in the UK and that Germany is a market that will deliver strong returns in the future.”

The acquisition mirrors the strategic opportunity Whitbread identified with Costa in China when it bought out Costa’s South China joint venture partner, she added.

“Whitbread’s strong businesses still have considerable growth opportunities in the UK,” Ms Brittain said.

“However, these two transactions and our continued investment in these new markets ives us confidence in our ability to build international businesses of scale in both Germany and China, that will underpin our growth for decades to come.”

The acquisition in Germany includes 13 leasehold hotels with a total 2,140 rooms that are already open and trading and six committed pipeline leasehold hotels totalling around 970 rooms, most of which will open over the next two years.

The hotels are all in prime locations, are of high quality and can be readily rebranded to Premier Inn.

The transaction and consideration are conditional upon obtaining consent from landlords to rebrand the hotels and upon the termination of the franchise agreements with the current franchisor, which could take up to two years for the 13 trading hotels. 

The hotels being acquired will continue trading under their current brand, in advance of being refurbished in to the Premier Inn brand.

The acquisition is expected to be earnings enhancing the year after completion.

Premier Inn currently has one hotel open in Frankfurt and a further 11 hotels in its committed pipeline across key cities in Germany.   

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