Premier Inn comes up with a genius solution to the employment crisis – paying more workers

Today’s news: Premier Inn comes up with a genius solution to the employment crisis – paying more workers

Premier Inn comes up with a genius solution to the employment crisis – paying more workers

A hotel chain has devised an unusual way to attract new workers amid a cost-of-living crisis – a salary increase.

White Bread, owner of the Premier Inn, has warned that his annual costs are likely to rise by as much as £30m, in a bid to avoid tough employment market challenges.

As demand increases, the group said it will achieve “targeted” wage increases across the business, as the industry struggles to hire.

The hospitality sector saw a stronger-than-expected recovery in trade after the end of pandemic restrictions.

Investment in IT

Whitbread – which also owns restaurant chains including Beefeater and Brewers Fayre – added that the introduction of renovation and maintenance projects, as well as some investment in IT meant their costs would rise by between £20m and £30m overall.

She said: Labour supply remains tight across the hospitality sector, and assuming consumer demand and occupancy remain strong, we anticipate some additional costs due to targeted wage increases.

We are also taking the opportunity to roll out our investment in refurbishment and maintenance projects as well as accelerate some additional IT spending that will strengthen our market leading position and generate future profits.

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

But the governor of the Bank of England asked workers not to demand a wage increase – in an apparent plea to curb inflation.

Official figures released yesterday showed that job vacancies in the hospitality sector jumped to a record 174,000 last month as companies face the prospect of staff shortages during the summer season.

Office for National Statistics figures revealed that total vacancies rose to a new record high of 1.3 million – and more than a tenth of these jobs are in the hospitality sector.

Hospitality companies in the UK posted 83% vacancies in the three months to May compared to the same period in 2019, before the Covid crisis broke out.

Whitbread

Whitbread says UK demand is beating its expectations, with first-quarter accommodation sales at 31% before pre-pandemic levels two years ago, and 235.6% a year earlier, when Covid restrictions were hitting trade.

Similar accommodation sales are up 21.3% compared to two years ago.

It added that overall comparable sales of food and beverages in the UK were still 4.3% below 2019-2020.

In Germany, where the company has opened 40 hotels, it says it has also benefited from a strong rebound in demand, with Premier Inn occupancy levels reaching 64.7% in the last four weeks of the quarter.

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

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

This impressive performance in the first quarter combined with improved visibility in the second quarter gives us increased confidence to deliver a strong first half and stay ahead of the market for the rest of the year.