Russ Mould, investment director at AJ Bell, said: “Pressure from US activist investor Corvex has taken hold at Whitbread as the company announces plans to sell and lease back a big chunk of its hotel estate and make significant changes to its restaurant business.
“The market seems unconvinced by the strategy based on the initial investor reaction.
“Lots of Whitbread’s peers operate an ‘asset-light’ model whereby they don’t own the sites they manage.
“There are advantages and disadvantages to both and while Whitbread will remain an owner of some of its hotels, the changes announced today and the plans to focus on leaseholds in the future are a clear nod in this direction.
“We can’t be too far away from Whitbread renaming itself Premier Inn PLC given its remaining branded restaurants are to be replaced with hotel-based food offerings.
“The logic to this move is obvious although the potential 3,800 job losses will only add to the gathering gloom around the UK economy.
“This in itself is a headwind for Premier Inn to manage.
“It will hope its keenly priced rooms, which are sold on the consistency of what you’re getting for your money, will see it benefit from people trading down from more expensive options.”
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