Premier Inn owner Whitbread warns of staff shortages as demand recovers

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Premier Inn owner Whitbread has said it will pay millions in wage rises and bonuses to try to combat what it calls persistent staff shortages.

The chain said hospitality-wide labour shortages meant a "material number of vacancies" remained unfilled.

Higher pay rates will cost Whitbread £12m-£13m, it said, while it is also paying £10m in retention bonuses.

Recent official figures show vacancies at a record, with hospitality seeing some of the biggest shortages.

The Office for National Statistics said vacancies reached 1.1 million between July and September, the highest level since records began in 2001.

The Institute for Employment Studies said this month that labour shortages were affecting the whole economy.

Many firms are being forced to pay signing on bonuses, or raise pay rates to tempt staff to work for them.

Staff costs are among a host of price pressures facing businesses and Whitbread also pointed to rising utility costs.

However, the company said its recovery in recent months had been better than expected, and UK demand had been "very strong" since 17 May when Covid restrictions were eased to allow leisure overnight stays at its hotels.

It added that it now expects revenue-per-room rates to return to pre-pandemic levels next year.

'Challenging' environment

At the start of this month Whitbread announced a pay increase for its UK-based hourly-paid staff.

It needs to add 2,000 staff to its current head count of 30,000, including in housekeeping, reception and kitchens.

Chief executive Alison Brittain said: "Whitbread traded significantly ahead of the market in the UK during the first half of the year.

"The operating environment during the summer and into autumn has been challenging largely as a result of our very high occupancy levels, market-wide supply chain issues and a tighter labour supply in the hospitality sector."

Its revenue remains 39% down on the same period pre-pandemic two years ago, but it has more than doubled since last year.

Pre-tax losses in the first half of the year narrowed from £724.7m last year to £19.3m, but this was still well down on the profit of £219.9m made before the pandemic.

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