Premier Inn owner Whitbread's profit fell after the cost of being booked by UK fell and fell, but stocks rose, promising stock buybacks and more hotel vacancies.

The UK's largest hotel group has 852 hotels in the UK and 61 in Germany, and adjusted pre-tax profits reportedly fell 14 per cent to £483 million for the year to 27 February. Revenue fell 1% to £2.9 billion as revenue per available room in the UK fell 2%.

Whitbread shares have raised 4% after they proposed a plan to refund £20 billion to shareholders through share buybacks and dividends in 2030, and will receive a £250 million buyback later this year.

In the UK, especially in London, business and leisure bookings have been weakened. Booking is good in advance, and during peak hours like summer, bookings are still robust, while short-term bookings are fewer than last year.

Premier Inn doesn't usually attract many American travelers. Whitbread CEO Dominic Paul said European tourists chose to take vacations in the UK rather than the US due to Donald Trump's hostile immigration policy.

Demand in the UK is getting stronger by growing growth in Germany, where one-fifth of bookings come from people attending sporting events or concerts, while bookings in the UK are less than 5%.

"This will be a breakthrough year for Germany and we will earn the first ever adjusted profit in 2026," Paul said.

Whitbread said it outperformed the broader UK market and pushed hotel openings. With the rest of the brand budget industry, Premier Inn is expected to grow in the coming years, while independent hotels are expected to decline further, meaning the entire UK hotel market will return to room levels in 2019 by at least 2027.

Faced with rising staff costs for national insurance and minimum wage hikes, the company's cost savings target cuts £75 million from this year, increasing its cost savings target from £50 million this year to £60 million. It is turning 238 underperforming brand restaurants into hotel rooms.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: “It’s difficult for hoteliers, but the UK’s largest hotel brand continues to outperform the competition. The group sticks to its room opening plan, but if the market is still weak, but if the market is still weak, the bottom line will keep the pressure small under the pressure this year, with very few rooms and cost-effective.

"The launch of German divisions is still developing rapidly, but this will not move the dial," Nathan added.

“With a massive investment plan approaching, management will hope that demand will not worsen. It will depend on the health of the global economy, which remains firmly under the cloud of tariff uncertainty.”