UK based hospitality company Whitbread PLC (WTB.L) is one of the many hospitality firms patiently waiting for an end to lockdown. While essentially the entire hospitality business has been damaged by national lockdowns and restrictions on travel, they will likely see a recovery once restrictions are lifted. Whitbread is in a potentially advantageous position in this situation being able to benefit twice from the lift of lockdown. Being the largest hotel brand in the UK, owning Premier Inn, and also owning significant restaurant/pub brands in Beefeater, Table Table & Brewer’s Fayre, they look poised to benefit from the pent up demand for both travel and dining out in the UK economy. 

They also have the advantage of having most of their operations in the UK at this time. Current vaccination rates see the UK leading ahead of Europe meaning a lifting of travel and dining out restrictions in the UK looks likely to come sooner than travel to Europe is opened up again. This means we may see a rise in so-called “staycations” with consumers eager to travel choosing holiday destination within the UK preferentially over waiting for international travel to open up, which would quite clearly directly benefit Whitbread’s Premier Inn brand and likely indirectly benefit their restaurant/pub operations.

However, the potential risks are as evident as the upsides. Whitbread’s fortunes are clearly heavily tied to both the lifting of restrictions, then the return for consumer demand thereafter. While it is in little doubt both these things will happen, the question of when remains. Being in the hospitality sector, they’ve endured significant losses over the last year and ideally, they need lockdown lifted by traditionally busy months in summer to jumpstart their growth.

Broker Consensus (09/02/21)

Analysts who cover this security

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