The British hospitality group had already warned of job cuts
Hotel and restaurant group Whitbread has asked landlords for a 50% rent cut for the next three months as pandemic restrictions continue to hit trading.
The owner of the Premier Inn, Beefeater and Brewers Fayre brands said in a letter to landlords they must “share some of the pain” of lockdown.
Britain’s biggest hospitality group, with 800 hotels in the UK and Ireland, had already warned of big job cuts.
Landlords and commercial property investors will likely resist rent cuts.
They have seen their own finances depleted by rent cuts and restructurings across the hospitality sector. Unlike many rivals, Whitbread had continued to pay rent in full.
Andrew Jones, chief executive of LondonMetric, a FTSE 250 property company with a Premier Inn tenant, said Whitbread has “behaved impeccably” towards to landlords “and so we will look to help them with their cash flow whilst the business recovers”.
But he added: A permanent transfer of value from our shareholders to theirs is not appropriate for a company still valued at over £6bn.
There are no contractual provisions for landlords to share gains in the good years and so sharing pain in the tough years seems inequitable. After all, you can’t un-sign a contract. Deferring rent payments for a period would be more “equitable”, he said.
Laura Lambie, senior investment director for Investec, told the BBC’s Today Programme that the letter, first reported by property news publication CoStar, was “worrying from the landlord’s point of view, not just Whitbread”.
A Whitbread spokesperson said that since the start of the pandemic the business “has taken decisive action to ensure that our cost base reflects the low levels of demand”.
The company added: Throughout the pandemic to date, we have paid our rent commitments in full, even when our hotels and restaurants were forced to close.
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