Budget Hotel Chain Now Feeling the Squeeze

There are some excellent examples of businesses that are significantly exposed to a downturn in demand from business travellers - British Airways is perhaps the best.  However, you can now add Whitbread to that list…

The Guardian reports a results statement from Whitbread which shows that its main profit earner - Premier Inn - is now suffering from the downturn in business travel.

Despite being positioned as a budget hotel brand, Premier Inn has experienced both a fall in room bookings (volume) and average revenue per room (price).

The impact of wider Internet distribution is also considered in the article.  The overall effect? To put downward pressure on hotel room prices as consumers are better able to use price comparison to find the best deal.

An excellent case study to bookmark for BUSS4 - Whitbread would make an ideal student research company.

Revision Presentation - Marketing Mix: Introduction to Pricing [17 May 2012]
Revision Presentation - Measuring and Increasing Profit [17 May 2012]
Revision Presentation - Calculating and Measuring Profit [13 May 2012]
It’s Time for a Global Luxury Chinese Hotel Chain - for the Chinese [25 Mar 2012]
Pampering - demand booms as consumers seek an affordable treat [4 Mar 2012]
Strategic change - the story of Whitbread [22 Feb 2012]
Revision Presentation - Workforce Planning [26 Dec 2011]
Time for this Dragon to Cut Costs to Keep his Health Clubs Fighting Fit [11 Dec 2011]
The Rise and Fall and Rise of Gerald Ratner [27 Nov 2011]
Cut price cup cake deal goes wrong…... [22 Nov 2011]
Unilever hit by rising costs [6 Nov 2011]
Profits dive and put pressure on liquidity - the Distress Monitor [29 Sep 2011]
Revision Presentation - Risks and Rewards to Enterprise [7 Sep 2011]
Revision Presentation - Adding Value [7 Sep 2011]
The puzzle of rising profits [5 Sep 2011]
An end to outsourcing? [18 May 2011]
Whitbread goes for organic growth [2 May 2011]
Kate & Wills - A Short-term boost to demand [9 Apr 2011]
Partners in profit - the JLP way [10 Mar 2011]
Protection for the endangered pasty [23 Feb 2011]
Introducing a new kind of business organisation - the benefit corporation [17 Feb 2011]
CSR - What is “Creating Shared Value”? [16 Feb 2011]
Revision games - Marketing Basics (True / False) [16 Feb 2011]
Michael Porter - Shared Value and the Limitations of CSR [15 Feb 2011]
Commodity prices in action - soaring Copper [6 Feb 2011]
CSR - The Classic Milton Friedman Clip [5 Feb 2011]
Q&A - What is “profit quality”? [7 Jan 2011]
Q&A - Distinguish between price and cost [2 Jan 2011]
Q&A - Should a business use a “loss leader” as part of its pricing tactics? [31 Dec 2010]
Dominos Pizza - Growth & Strategy (Part 3) - Smart Marketing [26 Nov 2010]
Dominos Pizza - Growth & Strategy (Part 2) - Innovation, Service and Smart Operations [26 Nov 2010]
Dominos Pizza - Growth & Strategy (Part 1) - Driving Competitive Advantage [26 Nov 2010]
Segmentation & Pricing - the Ice-Cream Price Pyramid [17 Nov 2010]
Cash flow Clue-doh! The Mystery is Revealed… [2 Nov 2010]
Profits up at Amazon - but so are costs [22 Oct 2010]
Making the FT Brand Sweat! [19 Oct 2010]
Analysing the Business Data - Marriage in Decline [19 Oct 2010]
Google, Profits and Diversification [16 Oct 2010]
Who ate all the pies? [17 Sep 2010]
Pricing Strategy - Mobile Data Networks [14 Sep 2010]
Strategy in Action - Crocs Comes Back from the Dead [4 Sep 2010]
Lesson Worksheet - Adding Value [10 Aug 2010]
Lesson Worksheet - Gross Profit Basics [5 Aug 2010]
Lost in translation - demand from public sector to dry up? [4 Aug 2010]
Nissan profits from a recovery in demand [30 Jul 2010]
Demand for Foreign Holidays Takes a Sharp Dip [14 Jul 2010]
Lessons from the business model of King & Allen [13 Jul 2010]
World Cup 2010 Business Winners and Losers [13 Jul 2010]
Emerging from Recession - Manufacturing Leads the Way [1 Jun 2010]
Profit seeking paradoxes in an oblique world [15 May 2010]
The dangers of focus on one product [9 May 2010]
UK Recession - Hotels Suffer Despite the Trend towards Staycations [3 May 2010]
A good example to use when explaining what firms do as they come out of a recession [22 Apr 2010]
Corus chief calls for more government funds for the economy [8 Apr 2010]
BUSS4 Research - a Corus of Disapproval [1 Mar 2010]
Managing a recruitment business through the recession [16 Feb 2010]
Taking Demand-based Pricing To Extremes [8 Feb 2010]
Video case study - substitute goods benefiting from the recession [1 Feb 2010]
9 business survival tips for getting through the recession [1 Feb 2010]
Strategy in a recession - Fusion Systems [1 Feb 2010]
Business priorities in a recession [1 Feb 2010]
What business students can learn from how businesses have handled the recession [1 Feb 2010]
Revision Presentation - Profit and Cash [30 Jan 2010]
Revision Presentation - Improving Profit [30 Jan 2010]
Demand and Supply in Sction - Haggis [25 Jan 2010]
Product, pricing and profitability in a changing market [20 Jan 2010]
Revision Quiz - Profitability & ROCE [6 Jan 2010]
Revision Presentation - the Basics of Profit [30 Dec 2009]
Revision Presentation - Revenues and Demand [30 Dec 2009]
Q&A - When is it appropriate for a firm to use penetration pricing? [21 Dec 2009]
Q&A - Explain price skimming [21 Dec 2009]
Q&A - What is the difference between pricing strategies & tactics? [21 Dec 2009]
Q&A - Explain what is meant by price positioning [21 Dec 2009]
Q&A - What factors should a business consider when setting its prices? [19 Dec 2009]
Q&A - How does pricing link to the objectives of a business? [19 Dec 2009]
Q&A - What is price and why is it so important in the marketing mix? [19 Dec 2009]
Video Case Study - Luxury Sound Maker Ditches CDs [4 Dec 2009]
Outdoor Ice-skating heads firmly down the product life cycle [3 Dec 2009]
Advertising Coming To A Windows 7 Desktop Near You [18 Nov 2009]
A tale of two bakers [16 Nov 2009]
Emerging markets drive demand for oil [16 Nov 2009]
Innocent Drinks - Teaching Accounts Exercise [9 Nov 2009]
Survive and prosper - emerging markets in the global recession [5 Nov 2009]
Emerging Markets - China’s Growth in Charts [5 Nov 2009]
Halloween - packed full of business studies lesson ideas [3 Nov 2009]
Santa goes back to basics in attempt to reduce the cost of Christmas [29 Oct 2009]
Q&A - How are businesses affected by unemployment? [27 Oct 2009]
Q&A - What are the main causes of unemployment? [27 Oct 2009]
Q&A - Explain what unemployment is and how it is measured [27 Oct 2009]
Managing Cash Flow - Beware the Economic Recovery [26 Oct 2009]
Pigging Out in the Recession [26 Oct 2009]
Entrepreneur takes advantage of the postal strike [24 Oct 2009]
Pricing strategies and tactics under investigation [15 Oct 2009]
Dyson launches a new premium product [14 Oct 2009]
Ukraine 1 England 0 - A match to remember? [12 Oct 2009]
Napster - Trying to compete, or getting desperate? [9 Oct 2009]
The Decline of Newspapers Creates a Surge in Local Startups [4 Oct 2009]
V-Water - from start up to exit [4 Oct 2009]
Strictly and X-Factor Drive Demand for Pizza [1 Oct 2009]
The lights go out for the nightclub market [26 Sep 2009]

BUSINESS TEACHER RESOURCE NEWSLETTER
Get first news of business teaching resources, ideas and other materials from tutor2u. Over 9,400 business teachers from the UK and around the world receive our regular teacher email newsletters. Sign up for free here!