Whitbread is preparing to exit its remaining branded restaurant operations in a sweeping restructuring that will place around 3,800 jobs across the UK and Ireland at risk, as the hospitality group doubles down on its core hotel business.
The company, which owns Premier Inn, confirmed plans to convert all 197 of its remaining branded restaurants into hotel-based food-and-drink services as part of a wider reset of its five-year strategy.
The move marks one of the most significant shifts in Whitbread’s modern history, effectively ending its presence in the standalone branded casual dining market and accelerating its transition towards a more streamlined, hotel-led model.
The group said the restructuring was designed to improve profitability and simplify operations amid sustained cost pressures, including higher property taxes and weaker consumer demand across the hospitality sector.
Rising input costs, including energy prices linked to geopolitical tensions in the Middle East, have also weighed on margins and added further strain to an already challenged industry.
Whitbread has previously begun converting underperforming restaurant sites into additional hotel rooms, but the latest plan expands that approach across its entire remaining estate.
The company expects the changes to reduce adjusted pre-tax profits by around £10 million in the current financial year, with most site conversions scheduled for the second half of the 2027 financial year.
As part of the overhaul, Whitbread also plans to raise funds through a property sale-and-leaseback programme, targeting around £1.5 billion in assets. Net capital expenditure is expected to fall by more than £1 billion over the next five years.
Around half of Whitbread’s estate is currently held as freehold property, but that proportion is set to fall to between 30 and 40 per cent under the revised strategy.
Chief executive Dominic Paul said: “We always challenge ourselves to improve and, in light of significant cost increases in the form of business rates and national insurance, as well as the implied market discount to our inherent value, we’ve looked hard at the options open to us to maximise value creation over the medium and long-term.
“This has been a rigorous process and we’ve approached all options with an open mind.
“Our new five-year plan builds on our strengths and drives a significant acceleration of our strategy.”
The restructuring follows sustained pressure from investors, including activist fund Corvex Management, which urged the company to review its portfolio late last year amid concerns over underperforming sites.
Whitbread had already closed more than 200 restaurants and cut around 1,500 jobs in a previous cost-saving programme as it shifted away from loss-making casual-dining venues.
At the time, the group argued that converting restaurants into additional Premier Inn rooms would deliver stronger returns and better align with long-term growth prospects.
The latest decision effectively completes that transition, leaving Whitbread more heavily focused on its expanding hotel network as it seeks to weather ongoing volatility in the wider hospitality market.
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