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Highlights
- FTSE 100 listed hotel and restaurant operator Whitbread Plc has warned of higher inflation across the hospitality sector in 2022.
- As per the industry experts, the pickup in inflation across the sector could be challenging for many businesses, and the company might try to offset the impact through price rise and cost savings.
FTSE 100 listed hotel and restaurant operator Whitbread Plc (LON: WTB) has warned of higher inflation across the hospitality sector in 2022 in its recent business update. As per the company, the inflation could be above historic levels in the range of 7% to 8%, adversely impacting the hospitality sector. As per the industry experts, the pickup in inflation across the sector could be challenging for many businesses, and the company might try to offset the impact through price rise and cost savings.
The hospitality sector, including restaurant joints, pubs, and bars, continues to suffer due to the recent rise in Omicron variant cases which led to the cancellation of Christmas and new year celebrations. To support the hospitality and leisure sector, the UK government announced a £1 billion fund in December 2021. However, according to the industry body, UKHospitality, the relief package was not enough, and losses suffered by the businesses were far more than the relief provided.
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Let us look at 3 FTSE listed hospitality stocks that are impacted due to the recent rise in the Covid-19 new variant cases:
Intercontinental Hotels Group Plc (LON: IHG)
The company owns and manages hotels, restaurants, and resorts in more than 100 countries under different brand names.
The company’s business reported a significant improvement compared to the previous year during the nine months to 30 September 2021. The occupancy rate was close to 60%, and around 29.6k rooms were opened during the period. The industry-wide inflationary pressure in 2022 will have some impact on the business, but having a strong brand name and various cost-saving initiatives by the company will help counterbalance the impact.
Intercontinental Hotels Group Plc’s last close was at GBX 4,954 with a market cap of £9,116 million as of 12 January 2022.
Mitchells & Butlers Plc (LON: MAB)
FTSE250 listed company operates pubs and restaurants in the UK and Germany. It has over 1,700 pubs and restaurants across different locations.
The company started the new financial year on a positive note. However, the rise in new variant cases during the important festive season impacted the sales. The like-for-like sales were down by 6% in the seven weeks to 8 January 2022. Also, the company anticipates higher inflationary pressure on the business operation due to an increase in wage rates and historic high prices in the energy market.
Mitchells & Butlers Plc’s last close was at GBX 257.60 with a market cap of £1,537 million as of 12 January 2022.
PPHE Hotel Group Ltd (LON: PPH)
The company operates full-service premium hotels and resorts in different countries under various brand names.
It recently completed the acquisition of FRANZ Ferdinand Mountain Resort, a hotel located in Austria. Also, the company entered the Italian market through the acquisition of 4-start Londra & Cargill Hotel. The business saw solid recovery and revenue growth in the nine months ended 30 September 2021.
PPHE Hotel Group Ltd’s last close was at GBX 1,420 with a market cap of £604 million as of 12 January 2022.
