Strategic partnering is the main procurement route used by Whitbread, including for its hotels, Brewers Fayre and Costa operations. Design-and-build contracts are also used occasionally.
Current and future projects
Whitbread's transformation from a brewing and leisure conglomerate into a pure leisure and hotel group is proving successful. While the Marriott/Swallow hotel division is enduring difficult times, others – notably David Lloyd Leisure health clubs and Brewers Fayre – are enjoying rapid growth.
Investment by the group fell by 14% in the financial year 2001/02. The decline related primarily to a winding-down in discontinued pubs and bar investments. Investment in continuing operations actually increased from £235m to £273m. The largest rises occurred in the David Lloyd Leisure and Travel Inn hotel divisions. Investment in leisure facilities increased by £24m to £57m, and investment in Travel Inns increased from £45m to £71m. Hotels remain the major sector in terms of investment at present. Hotel investment totalled close to £140m in 2001/02, compared with £127m in the previous year.
In terms of the firm's divisions, the Marriott/Swallow brand continues to suffer from sluggish tourist numbers, whereas conversely, Travel Inn added 20 units to its total in 2001/02. There was a mixed performance in the restaurant division. Brewers Fayre did well, developing another 14 units. There was a fall in sales for Beefeater as a result of disruption caused by rebranding. Finally, leisure sales grew by almost 20%, and five new clubs were added to the estate, bringing the total to almost 50.
Whitbread stated recently that it would direct new investment at the operations that are producing the strongest returns: Brewers Fayre, Brewsters, Travel Inn and David Lloyd Leisure. Travel Inn is expanding rapidly, with sales growth of 10% in the six months to September 2002 and more than 1000 rooms under construction. David Lloyd Leisure has distanced itself from increasing competition in the health club sector, with sales up 10% over the six months to September 2002. The group now owns 55 health clubs, with a target of between 50 and 100 openings planned for the next five years. In the restaurant sector, Beefeater disappointed, whereas Brewers Fayre performed well, and 250 new outlets are planned for the next five years.
Total capital investment in properties and plant in the same period was close to £110m, compared with £155m a year ago.
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