Premier Inn raises salaries for staff as it faces hiring difficulties

A Premier Inn hotel signage is seen outside the Durham North branch in County Durham, Britain September 22, 2020. REUTERS/Lee Smith/File Photo/File Photo/File Photo

Premier Inn said its costs would likely increase by up to £30m (Image: Reuters)

A hotel chain has found an unusual way to attract new employees amid the cost of living crisis – by raising salaries.

Premier Inn owner Whitbread has warned its annual costs are likely to rise by as much as £30m to avoid the challenges of a tough staffing market.

Faced with rising demand, the group said it will be making “targeted” pay rises across the company as the industry faces hiring difficulties.

The hospitality industry has seen a stronger-than-expected rebound in trade following the end of pandemic restrictions.

Whitbread – which also owns restaurant chains such as Beefeater and Brewers Fayre – added that bringing forward refurbishment and maintenance projects, as well as some investment in IT, would mean costs will rise by a total of £20m to £30m.

It states: “Labor supply across the hospitality sector remains tight and assuming consumer demand and occupancy remain strong, we expect some additional costs from targeted wage increases.

‘We are also taking the opportunity to frontload our investments in renovation and maintenance projects, as well as to accelerate some additional IT spending that will underpin our market-leading position and drive future profits.’

With inflation rising and household budgets under increasing pressure, wages are not keeping pace with inflation.

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But the Bank of England governor has urged workers not to demand wage increases – in an apparent plea for containing inflation.

Official figures released yesterday showed hospitality job vacancies rose to a record high of 174,000 last month as businesses face the possibility of staff shortages in the summer season.

Figures from the Office for National Statistics show that the total number of job vacancies has risen to a new record of 1.3 million – and more than a tenth of that in hospitality.

UK hospitality saw 83% more vacancies in the three months to May than in the same period in 2019 before the Covid crisis hit.

Whitbread says demand in the UK is beating expectations, with first quarter accommodation sales up 31% from pre-pandemic levels two years ago and 235.6% from a year ago when Covid restrictions hit trade .

Like-for-like sales of accommodations also rose about 21.3% compared to two years ago.

But total UK comparable food and drink sales were still 4.3% below 2019-2020, it added.

In Germany, where the company has opened 40 hotels, it says it has also benefited from a strong recovery in demand, with the Premier Inn’s occupancy rate at 64.7% over the last four weeks of the quarter.

The group said they were about 40% booked during the peak summer season for the second quarter.

Alison Brittain, CEO of Whitbread, said: “The strength of Premier Inn’s recovery in the UK continues to exceed expectations with a particularly strong performance in the first quarter, well above pre-pandemic levels, and we continue to significantly outperform the market.

‘This impressive first quarter performance combined with the improved second quarter outlook gives us greater confidence to deliver a strong first half and stay ahead of the market for the remainder of the year.’

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MORE : Wage increases shrink at record pace during 40-year cost of living peak Premier Inn raises salaries for staff as it faces hiring difficulties

Justin Scacco

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