Our business model and strategy
Our unique ownership business model provides us with a competitive advantage in our core market and has enabled us to become the number one hotel operator in the UK. It has also helped us to expand our presence in Germany.
Our unique vertically integrated model sets us apart
Our vertically integrated model, which combines the ownership of property, hotel operations, brand, and inventory distribution has enabled Premier Inn to grow at a significantly faster pace than competitors, deliver a consistently superior customer experience and generate a strong return on capital for shareholders over the last 15 years.
Hotel industry value chain
Premier Inn’s unique, vertically integrated model
Delivering quality & value-for-money for customers whilst creating value for stakeholders
Control & fund development
Optimal hotel location, design & layout
Balanced freehold/ leasehold
Large network, long tenure, refurb control, estate mgt.
Our own brand
Consistent customer offering
Consistent execution of high standards at low cost
Less than 1% booked via online travel agents
Low-cost customer acquisition & retention
Our operating model drives competitive advantage
Our model also provides a clear competitive advantage, enabling the delivery of a winning customer proposition that will have a strong appeal to customers in both the current and post pandemic environments.
- UK’s strongest hotel brand
- Market leading customer metrics
- First choice for more travellers
- Largest UK network
- Economies of scale
- Superior network access
Direct digital distribution
- Market leading direct digital distribution model
- Low-cost customer acquisition & retention
- All hotels operated by us
- High quality experience
- Consistent execution, no brand fees
- Dynamic proprietary pricing model
- Tailored F&B offering
- Low-cost access to capital
- Access to preferred sites at local level
- Lower rent costs
- Efficient operating structures
- Standardised model & rooms
- Ongoing opportunity to drive efficiency further
We have a proven strategy which is highly compelling
Our strong balance sheet and vertically integrated business model differentiate us from many other hotel groups. However, in conjunction with the careful execution of our business strategy, they have combined to deliver strong growth both in the UK and now Germany, whilst also providing a consistent and superior customer experience. The result has been an impressive track record of high return on capital for our shareholders and additional benefits for our other key stakeholders.
Our strategy comprises three key pillars:
GROW AND INNOVATE IN THE CORE UK MARKETS
We will continue to grow and improve Premier Inn, by leveraging the competitive advantages of the Whitbread operating model, including the strength and the Premier Inn brand, our market-leading direct distribution and capitalising on enhanced structural opportunities caused by a material reduction in UK supply.
Market share gains
FOCUS ON OUR STRENGTHS TO GROW IN GERMANY
The German hotel market is similar to that in the UK, making it a highly attractive market for Premier Inn’s international expansion. In a market with high levels of fragmentation and no market-leading budget hotel brand, Premier Inn has a great opportunity to replicate the success of the UK model here.
ENHANCING THE CAPABILITY TO SUPPORT LONG TERM GROWTH
Property backing and a successful efficiency programme help provide financial flexibility and the ability to invest in growth when others will be constrained
PROFIT RECOVERY AT ATTRACTIVE ROCE