Whitbread, owner of Premier Inn, is asking landlords to cut rents by 50% amid the coronavirus crisis.
The group has suffered a decline in revenue and heavy losses in the first half of 2020 as the hotel was closed due to lockdowns.
Whitbread also owns the Beefeater and Brewers Fayre brand. Earlier this year, the company announced 6,000 job cuts.
In the six months ended August 27th, the group recorded a loss of £660.5 million. This is a 483.6% decrease in profits made by Whitbread, made the previous year.
A Whitbread spokesperson said the business is “taking critical action to ensure that our cost base is low in demand.”
“Even when hotels and restaurants were forced to close throughout the past pandemic, we paid our rent commitments fully.
“Continued government restrictions are expected to curb market demand in the first half of 2021, so rent cuts for the December quarter, as other stakeholders have had during the pandemic. We are asking our landlords to support us through our current environment.”
Andrew Jones is the CEO of London Metric. This is a real estate company with FTSE 250 that has Premier Inn as a tenant. He said Whitbread “behaved perfectly” towards his landlord, and he said he “will try to help them with their cash flow while the business is recovering.”
The permanent transfer of value from shareholders to their shareholders is not appropriate for companies worth more than £6 billion. There are no contractual provisions for landlords to share profits in good years, so sharing pains in difficult years seems unfair. After all, you cannot cancel your contract. ”
Whitbread’s shares are trading +0.67% at 3,159.00 (0925GMT). Over the year, stocks fell from a high of 4,259.53.
