Our business model and strategy
Our unique ownership business model provides us with a competitive advantage in a challenging market, and has enabled us to become the number one hotel operator in the UK, and 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
Property development
Property ownership
Brand
Hotel operation
Inventory distribution
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
End-to-end operation
Consistent execution of high standards at low cost
97% direct booking
Low-cost customer acquisition & retention
Our operating model drives competitive advantage
Premier Inn’s unique operating model 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. The key components of the model that drive our competitive advantage, combined with our strong brand and direct distribution, are:
Brand strength
- UK’s strongest hotel brand
- Market leading customer metrics
- First choice for more travellers
Scale advantage
- Largest UK network
- Economies of scale
- Superior network access
Direct digital distribution
- Market leading direct digital distribution model
- Low-cost customer acquisition & retention
Operational control
- All hotels operated by us
- High quality experience
- Consistent execution, no brand fees
- Tailored F&B offering
Property flexibility
- Low-cost access to capital
- Access to preferred sites at local level
- Lower rent costs
Everyday efficiency
- Efficient operating structures
- Standardised model & rooms
- Ongoing opportunity to drive efficiency further
We have a proven strategy which is highly compelling
Whilst the impact of COVID-19 will be material on the hospitality sector, our strategic priorities are consistent with our proven plan to create sustainable shareholder value over the long-term. We expect to achieve long-term growth in earnings and dividends, combined with strong return on capital through disciplined execution in three key areas:
GROW AND INNOVATE IN THE CORE UK MARKETS
We will continue to grow and innovate Premier Inn, by leveraging the competitive advantages of the Whitbread operating model, including the strength and the Premier Inn brand and market-leading direct distribution and capitalising on enhanced structural opportunities.
Market share gains
FOCUS ON OUR STRENGTHS TO GROW IN GERMANY
The German market has the same characteristics as 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 the opportunity to replicate the success of the UK model here.
GROWTH
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
