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New dynamics for Whitbread since the sale of Costa Coffee

Following the sale of Costa Coffee to Coca-Cola for €4.37 billion, some investors are reported by Bloomberg to be waiting for the group's actions regarding the Premier Inn brand.

At the end of August Coca-Cola bought the Costa Coffee chain from Whitbread for 4.37 billion euros, boosting its price on the London stock exchange. But since this sale, investors have been impatient to find out what the hotel group's next moves will be.

Thus, Richard Clarke, analyst at Bernstein, told Bloomberg that since the sale of Costa Coffee for investors “The story reverts back to the core hotel business and investors who had a negative view on Premier Inn’s prospects may now be more comfortable with putting back on their short positions.”



Evolution of the Whitbread price on the London Stock Exchange between 19/10/2017 and 18/10/2018

The Premier Inn economy brand has an offer in Europe of nearly 66,000 rooms for 789 hotels. According to Hospitality ON's integrated channel ranking, Premier Inn was ranked in Europe as the 4th largest in terms of supply.

In October, the latter announced to Reuters that it would reorganize the management of all its hotels: operations managers would be either laid off or in charge of several sites. This would reduce the company's expenses and reinvest £300 million to develop 42 new hotels.

In a segment in full motion with the emergence of hostels and the development of certain other brands, such as B&B Hotels, which gained nearly 4,000 rooms (+13.0%) between 2017 and 2018, Premier Inn's next actions will be decisive in maintaining its position in the European Top 5.


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