Premier Inn owner Whitbread sees cannibalisation rise as UK competition grows – broker Proactive uses images sourced from Shutterstock
Whitbread PLC (LSE:WTB) remains well-positioned in the UK hotel market, though competition is increasing, according to UBS.
The bank said Whitbread’s Premier Inn brand continues to have the lowest level of nearby branded rivals, with an average of 4.6 competitors within a 10-minute drive.
However, this is up from 3.97 in 2019 and has risen 6.4% year on year, highlighting a gradual increase in competitive intensity.
While UK competition continues to rise, the group is seen as retaining a strong relative position in its core market.
The analysis, based on geospatial data tracking hotel locations and market dynamics, also showed a slight uptick in cannibalisation, where new sites overlap with existing ones.
Premier Inn’s cannibalisation rate stands at about 76%, just below 2019 levels, but has increased sequentially compared with the previous quarter.
This suggests that while expansion continues, there is growing overlap within the estate.
Investors are now looking ahead to Whitbread’s full-year results on 30 April, which UBS said could act as the next catalyst for the shares.