Budget Hotel Chain Now Feeling the Squeeze

There are some excellent examples of businesses that are significantly exposed to a downturn in demand from business travellers - British Airways is perhaps the best. However, you can now add Whitbread to that list…

The Guardian reports a results statement from Whitbread which shows that its main profit earner - Premier Inn - is now suffering from the downturn in business travel.

Despite being positioned as a budget hotel brand, Premier Inn has experienced both a fall in room bookings (volume) and average revenue per room (price).

The impact of wider Internet distribution is also considered in the article. The overall effect? To put downward pressure on hotel room prices as consumers are better able to use price comparison to find the best deal.

An excellent case study to bookmark for BUSS4 - Whitbread would make an ideal student research company.