Hello, and welcome to today's Whitbread PLC full year 2022 preliminary results conference call. My name is Bailey, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to Alison Brittain, CEO. Alison, please go ahead. Good morning, everybody, and thank you for joining us today. With me, I have Hemant Patel, our new CFO, in his first outing as CFO. Welcome to Hemant. I've also got here with me, Paul, Abby, and Sophie from the investor relations team. I thought I'll just say a couple of words about the results before we kick off for Q&A, and then I will hand over to you guys to ask the questions that you want. Paul has asked me to comment that it would be really helpful, given we've got a lot of people on the line, if you could limit yourself to two questions initially, and then we'll circle back if we've got time at the end to add additional questions. That's the key message. Let's just sort of kick off. Hopefully you've seen the RNS and/or listened to the presentation this morning. You will have seen that Whitbread's performance in the year was very strong and our revenues and profits recovered exceptionally well from the previous COVID low year. Our hotels have been trading well ahead of the market, particularly in half two of last year, where we really saw that strength coming through. Going on into the start of the new financial year, we are continuing to trade significantly ahead of the mid-scale and economy market, which itself, as you know, trades ahead of the whole market. We're about 28% outperformance for Q1 to date. My view is that good trading is driven by the actions that we've taken to manage commercial initiatives, but that is also helped by a strong appeal of our customer offer, you know, our very large network, our strong brand, our direct distribution and operating model. We certainly have seen hotel trading in the U.K. remaining very strong as we've gone into the new financial year. We had traded above pre-pandemic levels, and we are continuing to do so, about 29% ahead of pre-pandemic levels. We're seeing clear signs of recovery across all customer groups, so it's really quite broad-ranging. Leisure has been very strong and continues to be so. Tradespeople demand, as you know, was solid throughout COVID and has continued to trade well. We've now started to see the return of office worker, white collar, across the U.K., and even seeing now signs of inbound bookings certainly through website visits as a leading indicator. In addition, London sales, which has previously lagged the regions, have now moved also ahead of pre-COVID levels, and have come back up. Overall, that's a pretty strong position from a trading perspective and hotel side. Our forward book position is encouraging into quarter two. Then, I guess, the final piece of good news is that our network planning exercise that we've recently done, we talked a little bit about a small sample for this last time we spoke, but we've now done a much bigger sample. About a third of the market we've now looked at. That's showing clear evidence of an acceleration in the exit of independents from the market, which obviously gives us great opportunity to grow and has been, you know, one of the reasons for our success in previous years. We've continued to invest and invest well through the cycle, and so we should be very well placed to continue to gain market share as we move through the first half of this year and for the long term, given the structural change that is accelerating in our business. The only note of caution there, which we highlighted, we don't have a lot of visibility into forward bookings for half two. People are still behaving in a short lead way. You know, it's like looking into fog for the second half. We just haven't got bookings on the books that from September onwards that we would be able to point to. Equally, we have no negative evidence either, but we have nothing to show in the second half. Couple of other points I'll make. Our restaurants business has come back strongly from last year, but still behind pre-COVID level during the year last year. The trends have improved in the second half and continued to improve as we've gone into the new financial year. Now food and beverage sales are about 5% below pre-COVID levels in the first seven weeks of the year. I've still got to mention very briefly Germany, because I'm sure there'll be a lot of questions about Germany. The restrictions in Germany have been around for deeper and longer in Germany throughout the COVID crisis of two years. They have been a headwind in the hotel market. Now, they're largely being removed this month in April. I think there's still a few restrictions left in Hamburg, but most of the rest of the country is clear. The market's still a bit behind pre-COVID levels and recovering more slowly than the U.K. Notwithstanding that, as you would have seen in the presentation, if you've just been through that, hotels have traded in an encouraging way and have got absolutely stellar guest scores. Of course, in the last two years, during the COVID pandemic, we've transformed the German business out of all recognition. We've built an estate of now 37 quality hotels in prime locations across multiple cities that have got these phenomenal guest scores. I'm really confident about Germany. I'm really pleased about where we've got to, and I'm looking forward to being able to trade that hotel estate without restrictions for the first time moving forward from now and then on into quarter two this year. Couple of other points just to note to bring out the sort of highlights. We issued increased guidance on cost inflation for the year. Now it's about 1% higher than we previously guided at about 8%-9%. You'll have seen lots of media attention this morning on inflation levels because other companies have come out and announced significant inflation issues. We'll continue to monitor what we've got closely. We think that's about right for now. As you know, we work hard to offset the majority of that through a combination of a cost efficiency program. The fact that, you know, we've added 30 hotels in the last year and we'll add more this year and our estate growth helps. Then we've got quite a lot of pricing flexibility and you will undoubtedly have questions about that as we go forward. As we're moving into what I'd call the next phase of COVID recovery, and I think we'd have to accept that, you know, like like-for-like RevPAR have in fact recovered rather than being something that's going to recover. As we've had a really good performance and a bounce back this year, and we're quite confident in the group's outlook going forward, particularly strategically in the medium term, we're able to restore the dividend and the board is therefore proposing a dividend to be payable in July. I'll just finish by saying, although I have been talking about the short-term results from last year and into really the first half of this year, we must really always ground ourselves back with Whitbread into it having a long-term strategy and a clear one at that to create value. We are growing in the U.K. We've got, you know, at least a runway of a third again for growth, and we're innovating with new higher yield products like Premier Plus. We've got a great path for that growth. In Germany, we've built a platform that I think is now a very, very valuable platform for the future. We're still, you know, developing our capability to support that growth in the long term. I will very briefly just say, one of those capabilities is, of course, our people. During the course of the last year, our people have really stepped up. The operational environment has been challenging, and the delivery has been exceptional. My gratitude and thanks goes to everybody in the business for the work that they've put in and the dedication they've had to make these results possible. On that note, I'm going to hand over to Bailey, who's going to take us through Q&A. Please, do ask questions. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question today comes from Jamie Rollo from Morgan Stanley. Jamie, please go ahead. Your line is now open. Good morning, Jamie. Good morning. Morning, everyone. Thanks for taking my questions. I have just two. First, is there any steer at all you can give us on the shape of the year in terms of RevPAR? I know you don't like talking about RevPAR too much, but you know, the last four weeks are clearly you know, stellar, up around 20% it looks like. I saw the slide you showed on strong pricing for Q2. You talked about white-collar inbound coming back, independent exit rate accelerating. I mean, is it implausible for RevPAR to be up double digits for PI this year? I appreciate not much visibility, but just thinking about the sort of boundaries there. On Germany, that loss of 60-70, what RevPAR assumption is behind that? Because the last two weeks are a lot better. I appreciate it's there. If you could help us understand the sort of assumptions behind that would be very helpful. Thank you. Okay. That's good. Well, yeah, shape of the year, I mean, we're pretty confident we're having a really good quarter one, and we're mostly through it. We're two-thirds through quarter one, and people are shortly booking, but what we can see ahead, we've got about maybe a quarter booked for quarter two, but less for half two. That's where the opaqueness comes. In terms of, you know, RevPAR, we've got strong pricing going through and sticking and very strong demand. I do think all of the demand drivers are now coming back or have come back and are in strong growth. The last of them really is inbound. What we're seeing on that is a lot more website visits for inbound travelers, which is usually the lead indicator, and they're back to almost pre-COVID levels now. I think even that last piece, we will see some green shoots. It may not be fully back this year, but we'll see some of it. Across the board, otherwise, it is a very broad recovery. I'm sure some of it, Jamie, is pent-up demand. You know, there'll be a lot of weddings this year. People have put things off. There'll be a lot of people wanting to go to events. I suspect there'll be some still good staycation activity this year, which again, if people have got questions about, we can talk about. I do think you know what we can see at the moment is strong. Our only caveat to it really is the fact that we just don't have the visibility in the second half. Of course, there's lots of commentary out there about will the squeeze on the consumer you know led by this inflation lead to either them you know pulling in their horns because they don't have money and cash available, or because you know their confidence level is lower and therefore they are saving for the proverbial rainy day. Historically, you know, we've not done badly in those circumstances because people tend to trade down into Premier Inn, but without the visibility of a forward-booking profile into half two, it is really hard to call. I guess what we are calling out here is that there are uncertainties, and everybody has to sort of make their own judgments on those uncertainties. Certainly, I can foresee, you know, strong RevPAR shape for the year in the U.K. From a Germany perspective, Hemant, do you want to kick off with that? I wouldn't mind saying a little bit more about Germany. I know I have a highly confident tone, but I have just spent quite a bit of time out in Germany over the last few months in both the north and the south of the country, and it really is looking very impressive. Do you kick off? I mean, Germany, the outlook at the moment for us, as we've said that we think there's a GBP 60 million-GBP 70 million loss in Germany, which is the same as the pre-grant position from the previous year, in 2023. The assumption on RevPAR in that, if you remember, as we were coming through COVID, we talked about getting to a GBP 65 RevPAR in Germany. We're assuming about half of that at the moment. That's for two reasons. One, because the market is sort of recovering. The districts in Germany have only just opened up. Alison will talk about, you know, our view in terms of, and our confidence with the German market. It is early days. The German market has been roughly 40% behind 2019-2020 levels over the last few weeks, although it does look like it's picked up a bit this last week. We're making an assumption that that will take some time to come through, but obviously, it could be a lot quicker than we expected. It could match what's happened in the U.K. The other factor is delayed maturity. We've got a very new estate. Literally, we've got sites that are very new. They're just starting maturity. Also the other a lot of the rest of our estate has only just started to trade. We've had the market sites open for the last couple of years, but trading hasn't really happened yet. That's giving another kind of like half of that impact, in terms of delay maturity overall. Roughly half is the answer to your question. Yeah. We're being suitably prudent, as you would expect, because the market has been really bad and the recovery has been, you know, there's been restrictions in Germany for a lot longer than we have. At each time there's been an outbreak, it's lasted longer. It's been deeper. The restrictions have been tougher. They're only just lifting now in April. Clearly that doesn't give you a big line of sight. We, you know, the market has been 40% or so back in the last few weeks. That has started to bounce this week and now it's maybe 25% back. That's at market level. We can see the market coming back. I'm, you know, I do think that Germany will experience the same sort of bounce and the same sort of levels of pent-up demand as we've experienced in the U.K. over the course of the few months. It's just how fast will that come back and will it be as quick as the U.K. was during the course of last year. I'm pretty confident that, you know, over time, this year, the market will return in Germany to strong levels again. What I'm really also pretty confident about is that our German hotels are really very good indeed in the market. Our product is really excellent. I mean, anybody wants to go and visit, I'm sure we'd be delighted to show you around because we're so proud of it. We've got 37 hotels that look and feel a significant step ahead of the market competitors, our direct competitors. They're in prime locations. They're across multiple cities now, so we have the opportunity to start really building the brand in Germany. I think they'll do really well. And then they're efficient to run and to manage. We've got a great team in Germany who are running them. Overall, you know, I'm confident that over time, we're going to see good performance in Germany. It's just the speed with which that might come back through the market and demand coming back this year. That helpful, Jamie? Quite a long answer. Yeah, very much. Yeah, very, very helpful. You did mention staycations earlier, and just to pick you up on that, are you seeing any sign of weaker staycations this year due to more international travel? Just from Germany as a follow-up, you've given us guidance to break even during next year. When might you give us some profit targets, if that's not too premature? Thank you. No issues with staycations this year. I mean, our business isn't predicated on bucket and spade holidays. As you know, it's a relatively small percentage of our hotels are coastal. It is the broader leisure market that we are seeing is very buoyant. Obviously, because we're at the start of the warmer period now, I suspect we'll now be seeing, you know, the coastal areas and seaside towns booking. I think there's a lot of demand to go around. I think we will see increases in people traveling overseas. As we know, there's a constraint on the capacity in overseas travel through the airlines. The cost will probably be quite high. People are possibly thinking about whether, A, they can afford that high-priced holiday and might stay at home instead, or they're also thinking about the disruption that there is and the Ukraine crisis and war being pretty close. All of those things, I think, will make for a buoyant staycation year, as well as people returning to overseas travel at the same time. I think there's a lot of pent-up demand for both. Yes, not seeing anything that's of concern at this stage. Equally, as I said, not, you know, we're not even half booked for quarter two, so we've got a long way to go on bookings. What we have seen is the pricing has stuck, and so the pricing that we've put through, which we put through for the year is sticking. I always think the best way to also think about that pricing for us is. You know, our average room rate in the U.K. is GBP 60, just a little bit over GBP 60. You know, even with a 10% price rise, that's a pretty good value offer. Certainly, you know, less than GBP 70 a night is still a pretty good value offer for a quality Premier Inn, for a quality Premier Inn room. On that basis, you know, although the price, the price increase might sound a high percentage, actually in real terms, it isn't a huge amount out of somebody's pocket. Okay. Just picking up on Germany breakeven, clearly, a lot of our more mature hotels are actually on a unit level getting close to profitability, and will do relatively soon. We've also just a reminder that we've got a lot of expansion costs within the central cost base in Germany at the moment. Looking at the kind of a fully loaded P&L, it's difficult with the uncertainty that we've got in terms of how quickly that German market is gonna come back, and in isolation to give you a specific number. You know, we are talking about getting to a breakeven run rate in 2024. Slightly lower than what we said before, but it ends up very much depend on what happens with that recovery in the German market. What you'll have seen, I'll just add to it just because I'm quite upbeat about Germany. You'll see that we've had 12 more mature hotels and it's been a quite strange market to trade in over the course of the last 12 months. 12 hotels that have been open a bit longer, and you'll see that we did trade above the market level in those hotels. There's a chart in the pack on that subject. I'm quite confident about our ability to trade in Germany with a really high quality product and to make inroads as the market recovers. To be honest with you, Jamie, we'll be reporting again in six or seven weeks time in June, which will be the quarter one results. Obviously, we'll have a line of sight both into the summer in the U.K. and through the summer. In Germany, we'll have had another six weeks market trading and market rebound, so we can talk about it in a bit more detail then. Just to supplement that, well, obviously, we're still very clear that in the longer term, we expect to get to the group returns of 10%-13% ROCE in Germany. We're still very confident about that. Thanks. Thanks, Jamie. Thank you, Jamie. It did not escape my attention that Jamie snuck in a third question there, by the way. Fourth, I think. Yeah. Okay, who's next? Our next question today comes from Vicki Stern of Barclays. Vicky, please go ahead. Your line is now open. Good morning, Vicki. Good morning. I've got about 10, but I'm gonna restrict myself to two. Thank you. Just firstly, on the outperformance. I've picked up all your points in terms of broadly why you think you're outperforming the market. Just wanted to unpick, though, sort of what's happened there recently, because that was quite a big jump up in terms of your outperformance versus the market just in the last seven weeks or so, and even to the back end of Q4. What's driven that, do you think? Well, sort of sustainability of that, I suppose, as you look out into the next quarter. My second will just be around property. Hemant Patel, obviously, you talked in the presentation about not a lot of transactions out there, but the little that you have seen kind of reflect back on the previous revaluation of 2018. Just what are you thinking about in terms of doing another property revaluation, sort of timing of that and what form would that take same as last time in terms of sale and leasebacks or something else? Just a reminder on your strategy with regards to property. Thanks. Right. Well, I'll kick off with the first question about outperformance. I mean, I think there's quite a lot of things going on. We know that we're seeing supply leaving the market in the form of independents, for example, and that being at a higher level. Undoubtedly, there will be some underpinning there for that. But broadly speaking, yeah, our outperformance is both on occupancy and rate. You know, if you think about what makes up our performance, we've got you know, a higher occupancy level. We've got estate growth, where we're filling new hotels, and we've got higher pricing. Those three things packaged together, you know, we've loaded, I guess, got more confident as demands returned that our occupancies will be higher and that there is demand out there that is very strong, that is driving that higher occupancy. We are, you know, we have had estate growth, and we are therefore filling our new hotels. We have loaded higher pricing because we need to pass some of that through. The market pricing is higher, so, you know, we're not alone in putting through that higher price. That is sticking and still driving high occupancy. That's, I think, that's been the story of the first seven weeks. And you say, you know, "Is that going to be sustained?" I think our general level of strong performance, you know, I'm very confident about. In terms of outperformance of the market, well, the market coming back a bit, that more hotels will trade better, I suspect, particularly when inbound comes back, 'cause I think inbound has really weakened London, for example. We're going to cycle over periods where we already have high occupancy, you know, versus last year. We're, you know, if in previous quarter twos we've had occupancies of over 80, 85 or even 90%, we can't be more occupied than that. It will then go to growth, filling new space that wasn't there before, and pricing. I think that sort of broadly gives you a picture of the makeup and what may come next. On your second question, Vicki, regarding property transactions. Yeah, clearly we're at 56% freehold approximate business. You know, the owner-operator model we run gives us many advantages in terms of, you know, full ownership of our customer all of our customer interactions and obviously there are a couple of advantages to owning our property as well. We're keeping an open mind in terms of property valuation. As you said, there haven't been many transactions in the market really over the last couple of years. It's probably not meaningful to do a full valuation right now. The last time the estate was valued was in 2018, and we used an incremental sale and leaseback methodology, so kind of a careful sale and leaseback methodology, which is probably what we'd do again when, if we were to do so. That results in a valuation range of GBP 4.9 billion-GBP 5.8 billion. As mentioned in the presentation, you know, the transactions we see are generally in line where the tenants are generally in line with the yields that we assume in 2019 to kind of 4.5%-5% overall, with a range depending on location and quality of the asset. That on a like-for-like basis gives an indication that, you know, the valuation's held up pretty well, despite what's happened through COVID. Obviously we have grown the freehold estate in the meantime, so that would make a difference to the overall valuation. Right now I think we'll wait and see and keep an open mind on it. Thanks, Vicki. Thanks very much. Thank you, Vicki. The next question today comes from Richard Clarke from Bernstein. Richard, please go ahead. Your line is now open. Hi, Richard. Good morning. Hi, good morning. Two questions, obviously is what I have. The first one just on CapEx. One of your competitors has talked about sort of a CapEx sort of catch up program, having underinvested for the last couple of years. Your envelope for this year seems to be a return to pre-COVID levels, even though one would expect the sort of costs have gone up and there's still more hotels to open. Just some commentary around that CapEx envelope. What's included in that in terms of maintenance and is there any kind of catch up to come from the last couple of years? The second question, I know you've commented a few times that on pricing already. You say you've not got much visibility into the second half, but how are you pricing into the second half? Are you sort of starting prices off assuming that the strong pricing so far will carry on? Given the strong pricing we've seen so far, do you expect any kind of longer term changes to your pricing strategy? Are you gonna move some of the caps that you've had in the past, for example? Yes. I'll answer that second question first because it's right in front of my mind, which is, yes, we're pricing strongly for the full year. Yeah, we are making the assumption that we will have strong demand and that the market strength of recovery will be there, for domestic business and leisure travel and then a little bit of inbound as well. We're pricing that accordingly. Yes, while we haven't got many bookings on the books for the second half. Even pre-pandemic, that wasn't unusual. There was always, there's always breath holding in the summer because people tend not to book for the second half till they go back to school and work in September. Particularly business bookings sort of cease in August. Then you have the bated breath for the week after. Has the business demand recovered? It's not actually that untypical. It's sort of slightly more pronounced post-COVID that people book more short lead. Of course, you know, because you've got a market recovering, you yourselves are, you know, thinking much more hard about what that recovery will look like, as opposed to in normal BAU times when it is broadly speaking the same every year. Yes, but with our assumption is that the market is going to be strong and that the recovery will be maintained in the second half and our pricing strategy reflects that in terms of the increased pricing through. Okay. Richard, regarding capital. Yeah. So over the last couple of years, we spent in FY 2022 GBP 260 million on capital overall. Around GBP 90 million of that was U.K. maintenance and product improvement. Our intention is to take that back up to historical levels of GBP 350 million-GBP 400 million. We are gonna be opening 1,500-2,000 rooms this year. It's more just really a question of the outflow of the pipeline, rather than any reason why that stepped down slightly. You know, we expect to get back to 2,000-3,000 rooms going forward, FY 2024 and beyond. We have had some supply chain issues that have delayed that slightly, but we have full intention of taking our overall CapEx and refurb CapEx back to high levels. We've always spent a significant amount of money on refurb CapEx, so there's no need for us necessarily to catch up. There will be a little bit, you know, some supply chain issues that will unwind over this year and take that level back up again. Because we were able to invest through the cycle and through the difficult period because of the strength of our cash flow, I'm sure we're not as far behind as others who've been off for two years and haven't spent a penny for two years. I'm sure there is a little bit of catch up to do, and you're right, there's certainly some inflation in cost that we have to account for, but not like some of our competitors who probably just haven't spent anything for two years because they've been very cash constrained. Just to be clear then, the kind of CapEx guidance for this year, you would expect that will probably go up again into the following year as you begin to open more rooms again? Yeah, the timing of the room openings versus the CapEx spend isn't necessarily as switched to that obviously, as we're spending money to open rooms in the future as well. It's not quite, you can't make quite that correlation. As we said, we'll get back to that kind of GBP 350 million-GBP 400 million pound level going forward in the future. Obviously, we'll continue to monitor that as the estate grows. Thanks very much. Thanks, Richard. Thank you, Richard. The next question today comes from Bilal Aziz from UBS. Bilal, please go ahead. Your line is now open. Hello, good morning. Good morning. Thanks for taking my questions. Just the first one. You clearly talked about an acceleration of 3x in the market exits, and I think you flagged that you expect that to continue in the next 12, 18 months. Can you put that in the context of your market share aspirations now, over the next two years? You know, what do you think is a reasonable target and a return on that? Secondly, just thinking a bit further ahead and beyond this year, can you remind us on the hedging policy you have on the energy side, please, and how we should think about that, just moving ahead? Thank you. Okay. Yeah. We, I think just to sort of recap a bit, when we last spoke, we had done a very small sample of regions in London and outside London to see whether we were starting to see a material churn in the independent market. We were seeing evidence that that was the case. We then undertake this network planning exercise, which is quite a big deal for us because I think million people just does it really. We look at all the supply and demand that we expect to come into the market and go out of the market over the next few years. You know, looking at planning permissions and public statements from competitors and what we think Airbnb will do, but also looking then at the independents, which are very hard to monitor because most of them are very small, you know, single-owned businesses, and they don't report through STR data in the way that the big companies do. In looking at whether or not they are leaving the market, it's slightly more complicated than just seeing that they're currently closed, which we could do off screen scraping from websites and phone calls to see. We also, of course, want to know that we're not going to reopen as something else, later or that they're just closed for a refurbishment or they've been bought by another player and they're going to be refurbed and reopened and be a vibrant competitor. It does take quite a long time to do this exercise, and we're about a third of the way through it with a relatively broad sample size within that third, so we can see what's happening across the whole of the U.K. and into London. We think we are able therefore through that exercise to see that there is a decline in the independent sector that is significantly above the sort of normal run rate. I think for those of you who followed us for a very long time, at the end of the last recession, we also saw an acceleration in the decline of the independents, which put us in a good space for growth. It happened quite a while after that recession. You know, people hung on and it was a couple of years later when that really accelerated. I think we're seeing the acceleration now. I think we're seeing it has happened through COVID, and it's happening now and will carry on probably for the next, as we said, 18-24 months that we'll continue to see that. At the moment, you know, the other picture is supply. There is some supply growth in London. We think about 2% supply growth in London. There's not a lot in the regions happening at the minute. You know, other supply and other entry. I'm talking about mid-scale and economy here rather than sort of overall market. We feel relatively relaxed about that. We're growing, as you know. We've put 30 new hotels in last year and we've got 1,500 - 2,000 rooms going in this year. We know we've got our own growth to go. All of that combines to us being, you know, comfortable that we're going to have some market share growth. It's quite hard, however, to pinpoint it, and I'm not going to put a number on it. Equally, we will have been flattered in the last year or two in terms of really the gross market share position for us from a load of hotels being completely unoccupied or even closed during the COVID crisis. At this stage, if not, I don't think it's a stable number. It's certainly going to be an improvement on our pre-COVID market share, but I don't think I'm ready to call it yet as a specific number. Energy, Hemant? Yeah. Bilal, we hedge across electricity and gas in particular. We're obviously very conscious of the utility inflation that's gonna come through and it's particularly been exacerbated since the beginning of the Ukraine crisis. We're 100% hedged for this financial year, FY 2023, and we're 40% or just over 40% hedged for FY 2024, relatively evenly spread across electricity and gas. Clearly, we will continue to monitor that. We move our hedging position season by season, and we'll continue to monitor the cost of futures, and that will move on as time goes on. Great. Thank you very much. Brilliant. Thank you. Thank you. Our next question today comes from Alex Brignall from Redburn. Alex, please go ahead. Your line is now open. Good morning. Hi, Alex. Morning. Morning. How are you doing? A couple of questions, please. There was an interesting comment on the call, the pre-recorded call about using Tripadvisor. I know you already use it, but have you had any thought about your stance on sort of transactional OTAs? A few of the other hotels have talked about spamming their relationships with the OTAs during COVID. Some of them tie that into some sort of mix shift between business to leisure. If you had a view on that and then also Yeah. Just a sort of minor correction there. It needs a nuance. We don't use OTAs in our hotels, including Tripadvisor. The comment on Tripadvisor related to restaurants, which was when you get Tripadvisor reviews of restaurants, you can then click through to book a table in the restaurant, and I think that's the innovation the restaurant teams have put in. It's not. We don't use OTAs at all in the hotel business, and we're not anticipating moving to using OTAs in the hotel business. We've weaned ourselves off them. We've got, you know, the booking. The outperformance you're seeing from us is all done without anything other than direct distribution, except for a small amount, which is travel management companies, where, as you know, the people who book through travel management company cannot be cannibalizing because they're not allowed to book direct. That's the sort of makeup of the distribution. Sorry for the confusion on Tripadvisor vis-à-vis restaurants. No, that's really clear. Thank you. Then the second one, you said there's line of sight to 60,000 rooms in Germany. I don't know if you want to give more detail on that given the competitive nature, but if you could give any more information on the kind of pricing that you're seeing on assets, that'd be really helpful. Pricing on assets. Sorry. Let me just get grip on the question. On potential- Glad to hear that. Potential assets. Yeah, yeah. Yeah, there's not been a lot of moves in Germany on asset prices, i.e., they've not got cheap all of a sudden. There have been, and we have been the recipient of some distressed assets. For example, our Centro Hotel Group purchase was a company that was in financial distress, and we were allowed there with them to cherry-pick our preferred number of hotels from their portfolio. We managed that acquisition not as an acquisition of the whole co, but as an individual negotiation with each landlord to transfer the assets to us with the consent of the current owner and a small premium to them. That sort of thing we have not only seen but executed against. I think we will definitely be set over the coming months, given that the restrictions are just ending in Germany and therefore government grants and state aid will start to peter out and come to an end. I think we will see more of that, more distressed asset activity over the course of the next 12-24 months. You know, that will occur. That's what I've prognosed. Was there a first element to that question as well, rather than just the asset price? Was there something else you asked at the start, Alex? Yeah, just any detail you had on how the route to the 60,000 number that you mentioned? In terms of the original 60,000 number, I mean, that's still quite a small market share when you compare it to what we do in the U.K. Just to refresh your memory on it, Germany's a bigger market, has more business and leisure travel and is more fragmented. It's 73% independents in decline rather than about 50% in the U.K. Actually, I think it's quite a conservative line of sight to 60,000 rooms. That would give us 6% market share, and we have double that in the U.K. We're not uncomfortable that that is a, you know, a prudent target to be had over the next few years. That may well then lead to a longer runway and growth thereafter. It would make us the number one player in Germany, and that's our aim. Sounds good. If I could ask a follow-up on that bit. How much of it do you think would end up having been new builds versus acquired hotels? Hard to say. Hard to say. I mean, we've done plenty. We've started organically. As you know, we've done couple of acquisitions. Honestly, I don't know where we'd end up. It will depend entirely, I think, on what we see as becoming available in the market. Certainly, we're now. You know, we'll build our own strong organic pipeline, which we like to do. We're well-known in Germany now with developers. We don't have to sell ourselves or our covenants with developers in Germany. If there are opportunities, they come to us. We've got much more opportunity to do both organic and inorganic as we move forward. We set hurdles. We're very disciplined about the capital that we deploy and about how we set the hurdle for it, and we make the best choices for capital deployment with the highest returns. We're ambivalent as to which route. Brilliant. Thank you. Thank you, Alex. The next question today comes from Tim Barrett from Numis. Tim, please go ahead. Your line is now open. Morning, Tim. Hello. Morning, both of you. I had my two questions on food and beverage, if that's all right. Slide 25 is very helpful, and looking at the detail, it looks like within the last two months, that -4.6% has been a little bit better in the last few weeks, even though VAT has gone back up to 20%. Specifically, I just wondered what you've done on price in recent weeks as the VAT's gone back up, and what you intend to do this year was the first question. Yeah, you're right. It has gone back. It has gone up as we've gone into the new year, slightly on the chart from 25, I think. I think it's about 5% back on pre-COVID levels as we speak at the moment in the first seven weeks of a new trading year. I mean, we have done lots of initiatives, quite broad initiatives to bring back both demand and to make sure we've got the right focus on margin as well. We've launched new spring menus and reconfigured some of the menus, both for supply chain issues and for pricing. Equally, we've been very focused on ensuring that we remain competitive, and we don't just lose covers at the expense of, you know, gaining price. It's, you know, we're managing it in a sort of relatively dynamic way. We are lucky in restaurants because we trade on seasonal menus, so we can always reissue and reprice if we think we've got issues. We've also done a lot of work on drinks and pricing, and there have been some price rises, as you've probably seen in beer and other drinks products, which again is helping us improve our margins. Again, do you want to add to that, though? I think it's worth mentioning as well that across the value end of the pub market in particular, a lot of discounting has come out over the last couple of years post-COVID. That's meant that net pricing is actually it's been a bit higher across the market, and we've obviously, you know, been part of that as well. With the new menus that we've put in, we've simplified a lot of the menus, but also some of the pricing as well to make it a lot more hard-hitting to get to drive demand. Okay. Just a follow-up there, which was just, is there anything material to call out in terms of the joint sites, the separate pub restaurants, and those integrated restaurants within Premier Inn? No. Nothing to call out at all. Okay. Thanks very much. That's all right. Thanks, Tim. Thank you, Tim. As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. The next question today comes from Joe Thomas at HSBC. Joe, please go ahead. Your line is now open. Hi, Joe. Hi. Yeah, good morning. Good morning, both of you. Just a couple of things, please. The first one, sort of longer term, I just wanted to ask you about your returns on capital targets. Obviously, the capacity outlook's getting better, the estates being optimized, new hotels getting you know more operational leverage in them. You know, pricing is good. I'm just wondering, how conservative, to put words in your mouth, you might be being on those long-term return on capital targets, which I would have thought might be edging up by now. Secondly, just would like a little bit more visibility, if at all possible, on the white-collar office demand. I know you said it. I think the phrase in the presentation was it's recovering well. I just wondered, if there's any harder data that you can put around it, please. I mean, we're not at all uncomfortable with our ROCE with our return on capital position. We've guided for Germany 10%-14%, which is our sort of mature returns profile for Germany, albeit, you know, the immaturity they trade below that until they've reached mature levels. You know, that will be part of the makeup of, I guess, sort of slightly less productive capital or not capital that is operating at its full level as part of the group. As Germany gets bigger, there'll be a bit of that. Which means that we're comfortable with our overall returns profile returning to the pre-pandemic levels that which we've been always comfortable running at. Yeah. I haven't got anything to add more to. We certainly wouldn't be notching it up at this stage. Yeah, I think that's exactly right. I mean, we've talked about getting back to group returns of 10%-13% ROCE overall, with obviously depending on the maturity of the German business. That is roughly the level, but behind that level where we were pre-COVID, and you know, but our first stage is gonna get back to that level before we decide to take that any further. Yeah. Okay. On business demand and office worker trends, that's about 25% of our revenue, about half our business, which is half the main revenue. Obviously the other half is blue collar or tradesperson demand, which has stayed very robust throughout the whole COVID because it's essential business travel effectively. Office worker demand, it hasn't been. We think. I mean, demand was subdued until September, and then we started to see increasing the levels of demand from September onwards. We clearly had a bit of a blip during the early part of the year, the back end of the year and early part when we had that Omicron wave for a short period of time. It got back to pretty fast recovery thereafter. I mean, we now see midweek bookings, which is the predominant white collar worker, Tuesdays and Wednesdays, they're all ahead of pre-COVID levels. London's also now ahead of pre-COVID levels as well in the last several weeks. That's a sort of proof point for the business demand. We've worked quite hard on business demand, you know, while we were closed to make sure we were set up for success. We've extended our customer reach through an improved business booker portal. We've also widened out the number of travel management companies. It's a bit. It certainly, we've seen very good results from the business booking portal with people coming through, and we extended credit facilities into SMEs as well, which we put in place during the COVID crisis. Again, another step up there. Yeah, we can definitely see average room rate growth across that business booking period now, and we're pretty comfortable with it. Brilliant. Thank you. Thank you, Joe. I'm not sure if we do have any more questions, but we are coming to the end of time. Bailey, if we have one more, we'll take it. If we haven't, then we are absolutely good to stop because we kept everyone to 10:10 A.M. already. Yeah, we have no more questions currently registered. That's fantastic. In which case, thank you everybody for dialing in. Any follow-ups, please do let us know and have a good day, everyone. Thank you. That concludes the Whitbread PLC full year 2022 preliminary results conference call. Thank you for your participation. You may now disconnect your line.