• Premier Inn makes overseas hire

Whitbread's appointment of Paul Macpherson as international MD of Whitbread Hotels and Restaurants seems to indicate that the company is ready to look overseas, weeks after the group's Q3 trading update, at which it said that it would focus on the UK ahead of its foreign business.

While the company has not added any specifics around its growth plans, the act of hiring suggested increased confidence and was in line with other operators, which have this week been bolstering their development teams for the New Year, amongst them Orient-Express Hotels and Malmaison.

Macpherson has joined from Jumeirah Group, where he was chief development officer, building on his experience in Asia and the Middle East for groups including Hilton. Andy Harrison, Whitbread's new CEO, commented that the new hire would see the group "continue to develop our strategy building on our recent experience in the Middle East and India".

Outside the UK, the group has three hotels in Dubai, plus two being built in Abu Dhabi, one in Bangalore and one in Delhi. The Dubai hotels have recently been held back in terms of occupancy and rate by the wider issues in the Dubai economy and Harrison identified India as the biggest potential opportunity for the group, describing the current openings as along the lines of "test marketing".

Now that this test marketing looks to be moving up a level, the group will be turning to Macpherson for the best method of expansion, somewhere Harrison is keen to "limit the capital that we commit to opportunities like that in a sensible balanced way".

Macpherson will not oversee the company's other international brand, Costa Coffee, which has more than 600 stores in 25 countries. It is unlikely that the group is planning to take Brewers Fayre or Taybarns to India, making Premier Inn Macpherson's sole focus.

When expanding Costa, the group has looked predominantly to franchising, a route it is unlikely to follow in India, where it had expanded as part of a 50:50 joint venture agreement with developer Emaar-MGF, which it is thought to have bought out last year, as a result of the slow speed of growth. At the time, the partners set out to build 80 Premier Inn hotels in India over a decade with an investment of £300m.

Whatever the short to medium-term plans overseas, for Harrison, Macpherson's appointment will at least be a diversion from squabbles at home. Back in the UK, Whitbread and Travelodge are once again at loggerheads in the press, this time over claims that Premier Inn was only providing selected data to TRI Hospitality Consulting's HotStats service.

This, Travelodge e-commerce director Charlie Herbert told the Mail on Sunday, meant that it was getting "a distorted view" of the budget market. Whitbread has said that the TRI benchmarkers had full access to their data in accordance with their agreement. And TRI has made clear that it sees no problem with the data. Despite this, Travelodge has withdrawn from HotStats.

 

HA Perspective: It would be easy to read too much into the appointment of Macpherson. The truth is that it will be many months before we understand whether Harrison is intent on pursuing growth outside of the UK more energetically.

What the row with Travelodge does suggest, however, is that the UK market is becoming increasingly competitive. The period when simply opening a branded budget hotel was enough to succeed has gone.

In the near term, there is undoubtedly more growth to be squeezed out, even if much more care is needed. Longer term, it looks unlikely that the UK can deliver the pipeline expansion Whitbread needs to maintain momentum. Either a route to overseas growth is found, or Premier Inn will become a stagnating business.

 

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