Patrick Dempsey, Chief Executive Officer, Whitbread Hotels & Restaurants

_ Our floating bedroom is a major innovation in hotel design and means we can now bring Premier Inn to fantastic locations such as Leicester Square and to other sites where outside noise could be an issue. The innovative bedroom design has been created by an expert team of acoustic engineers, architects and construction specialists. Each room will be formed from an independent box with no contact with the neighbouring rooms or hallway. Acoustic linings to the walls and ceilings will provide sound insulation between bedrooms; building services are isolated; and windows will have quadruple glazing. Premier Inn has spent six months perfecting the design to ensure it meets the standards set by the company’s ?Good Night Guarantee”. Two trial bedrooms – one with a timber frame and a second with a metal frame – have been built at the site and studies have been undertaken to establish their performance. The success of the floating bedroom design is great news for all of our guests. It means we can be confident about guaranteeing a good night’s sleep even in the heart of one of the world’s liveliest and most celebrated entertainment centres. The design has the potential to be used elsewhere should the case merit it.Patrick Dempsey : It is certainly true that London is performing well as occupancy levels have steadily been increasing since 2009. For Premier Inn, demand in London has clearly been a lot stronger than in the rest of the country – in Q1 we saw a RevPAR growth of 8.8% in the capital. However, our RevPAR growth of 1.2% was positive in the regionsPremier Inn is presently leading the Economy segment of the hotel industry in the United Kingdom with almost 600 properties and over 43,000 rooms, and yet the group expressed its intention to develop 65,000 rooms over the next five years. How do you intend to do so? We announced at our preliminary results in April our new 5 year milestones for Premier Inn, to grow our number of rooms by 22,000. If you look back at historical data on the hotel market, you can see that over the 3 year period (2007-2009) Premier Inn grew its room capacity by 23% in a flat market. Much of this growth came from winning market share from the independent hotel market. We be¬lieve there is a substantial opportunity to win more market share. We’ve completed a thorough review of our network mo¬del, looking at supply and demand by individual post¬codes and projecting forward the market opportunities. This more sophisticated network model has reinforced our previous conclusion that there is a substantial opportunity for Premier Inn. It also shows that over 40% of our growth will come from new catchment areas and in towns like Bath, Canterbury and Windsor, where we currently have no presence. Over 60% of the growth will come from London and Southern England. We already have 11,000 rooms in a committed pipeline of which 4,000 will be built this year. The key point is that we now have a number of different formats to access the property market and to deliver our room targets in the most capital efficient way.Would you rather favor organic development respectful of your standards and hotel concepts or would you be more opportunistic to reach your objectives through acquisitions of existing networks? We would always favour organic expansion but ultimately we would look at all area market opportunities.Was it easy to turn the 21 Holiday Inn Express that you acquired in 2008 into Premier Inn hotels? Could that conversion be an example for other acquisitions? Managing the conversions was a relatively straightforward process. Although we do not have any immediate plans to carry out an acquisition programme on this scale, the success of the Holiday Inn Express deal proved that Whitbread Hotel and Restaurants has the capacity and capability to carry out large-scale conversions with relative ease.How do you measure the real potential of the Olympic Games in the London area in terms of new hotel developments? How far do you intend to participate in the new expansion of hotel capacity around London? Is this realistic? The Olympics will certainly turn the spotlight on London in 2012 but we see the capital and the M25 region as critical to our long-term plans and not just for the duration of the Games. Premier Inn will have 62 hotels and 8,004 rooms within the boundary of the M25 by the time of the Olympics but we have ambitious plans to grow our presence in London still further and well beyond 2012.Would you be satisfied to be recognized as the leader of the economy hotel segment in the British Isles as your sole playground or has the group real international ambitions apart from opportunistic expansions? We do have International ambitions. Premier Inn International is making steady progress. Our 5 hotels in India and the Middle East are improving occupancy… and we have 4 more in our pipeline. We have appointed a new Managing Director, Paul Macpherson to lead our development. This will be within a new capital lite framework where we will combine a small number of wholly owned hotels with management contracts and joint ventures. This capital lite approach will help to improve our returns, better manage risk and speed up delivery. We believe there is an attractive medium term growth opportunity and it will take a number of years to convert this into a strong profit growth platform. We hope to update the City on our plans in October at our Interim results.What about Premier Inn “mini-solus”? Do you consider it as a new brand to complete the inventory with a product even more accessible than Premier Inn? Do you see it as a spearhead to make your way through the city centers where real estate is very expensive? _ Our mini-solus format is not a new brand it is exactly the same room type as our other hotels just will a smaller F&B offering, however it does open up new sites to us, typically in high street locations, above stores or as part of mixed use developments. The first opened in Stratford-upon-Avon in April 2011 and we have plans to develop at Leamington Spa. By making smaller sites work for us, we have a host of new site opportunities which will help us meet our targets.What is your expectation in terms of number of hotels and rooms in the UK? Would you consider exporting the concept of “mini-solus” model outside Great-Britain? _ We are accelerating our growth plans for Premier Inn and we are looking to expand our portfolio of 43,000 rooms by 50% to 65,000 and are going after sites and opportunities that will help us to do that. In 2011/2012 we will add around 4,000 additional rooms – in overall terms, that’s growth of 9%. Mini solus is in its infancy and we would want to see it established here in the UK first before exporting the concept.Premier Inn developed recently a new industrial design through the “Floating bed rooms” concept. How could that facilitate your development strategy? _ Our floating bedroom is a major innovation in hotel design and means we can now bring Premier Inn to fantastic locations such as Leicester Square and to other sites where outside noise could be an issue. The innovative bedroom design has been created by an expert team of acoustic engineers, architects and construction specialists. Each room will be formed from an independent box with no contact with the neighbouring rooms or hallway. Acoustic linings to the walls and ceilings will provide sound insulation between bedrooms; building services are isolated; and windows will have quadruple glazing. Premier Inn has spent six months perfecting the design to ensure it meets the standards set by the company’s ?Good Night Guarantee”. Two trial bedrooms – one with a timber frame and a second with a metal frame – have been built at the site and studies have been undertaken to establish their performance. The success of the floating bedroom design is great news for all of our guests. It means we can be confident about guaranteeing a good night’s sleep even in the heart of one of the world’s liveliest and most celebrated entertainment centres. The design has the potential to be used elsewhere should the case merit it.