Hello, everyone, and welcome to the Whitbread PLC Q3 Trading Update Call. My name is Nadia, and I'll be coordinating the call today. If you would like to ask a question at the end of the presentation, please press star followed by one on your telephone keypads. I will now hand over to your host, Alison Brittain, CEO of Whitbread, to begin. Please go ahead. Good morning, everyone. Thank you very much for joining the call for our Q3 Trading Update. I'm joined as usual, but very probably for the last time, I suspect, by Nicholas Cadbury, our Group CFO. We've been totting up. We think this may be his fiftieth appearance, on one of these calls. Do make sure you have lots of extra specially tough questions for him today, please. I'm also joined by our UK Finance Director, Hemant Patel, and by Paul Tymms, our Head of Investor Relations, both of whom will be well known to you. I hope you've had a chance to review the Q3 release this morning, but it did go out at 7 A.M. I'll start with a very brief overview just to bring everybody up to speed, before we hand over to Q&A, when we will all be happy to answer any of your questions. During this quarter three, which ran until the 25th of November, we continued to trade very well and significantly ahead of the market in the U.K. Total accommodation sales were 10.6% ahead of full year 2020 levels. Just to be clear, that comparator full year 2020 is the year before the COVID crisis. The like-for-like period would have been Q3 2019. That accommodation sale, being 10.6% ahead of pre-COVID levels, that represented 14.9 percentage point outperformance against the mid-scale and economy market. The value pub and restaurant sector in which we operate remains more challenging, and our total food and beverage sales were down 11.1%. That was in line with the segment or the sub-segment of the market that we're in. As we moved into quarter four, which starts at the end of November, ran through December and to date, U.K. accommodation sales actually remained resilient. In December, total U.K. sales were 5% ahead of the same period full year 2020. Now, clearly, the impact of the Omicron COVID variant has resulted in a slight softening of hotel bookings in recent weeks, but it's a bit too early to assess what impact that's going to have. I'll come onto a forward look in a moment. We did see, however, a greater impact of that Omicron on our F&B sales, which were down 17%, compared to full year 2020. If we look forward into our next financial year, which starts in March, and in the absence of further material COVID restrictions, we are very optimistic about performance, and we're maintaining our expectation that Premier Inn UK like-for-like RevPAR run rates will recover to pre-COVID levels during 2022. As you all know, sector cost inflation next year is expected to be above historic average levels. We expect to be able to use some of our advantages to largely offset the higher levels of inflation. That, by advantages, I mean, in this regard, cost efficiencies, estate growth, and yields management. Turning to Germany. In Germany, our open hotel estate now stands at 32 hotels with a further 43 hotels in the pipeline. Despite the current restrictions, the German portfolio performed in line with the market in Q3, achieving occupancy levels of nearly 60%, up from 47.5% in Q2. Subsequently, the increased government restrictions have acted as a significant drag on market demand, and our occupancy levels have reduced in the last six weeks. We are, however, extremely confident in the opportunity for the Group to create value in Germany. We think that opportunity continues to be compelling and we will therefore continue to look for opportunities to grow the estate and deliver good long-term returns. Omicron has proved to be a not unexpected bump in the road, but notwithstanding that, Whitbread remains in a very significant position of strength. The good performance of the Group in the period resulted in an operating cash inflow for the period to the end of December, and we have a very strong balance sheet and liquidity position. That strong balance sheet is enabling us to invest in our growth strategy through the cycle and during a period when others are constrained. In the U.K., we're going to continue to grow through maximizing our considerable competitive advantages. That's our national scale and our focus on the domestic budget accommodation sector and the fact that we operate the number one brand in the U.K. with a very broad customer base. That alongside our direct distribution and best-in-class operating level are all underpinned by a market-leading sustainability program. These are quite unique attributes, and they give us a strong and sustainable platform with a flexible commercial model that allows us to deliver effective pricing, estate growth, and cost efficiency, ensuring that we're in a stronger position than others to offset inflationary headwinds and return to our pre-COVID margins. Whilst in Germany, the opportunity to replicate this platform and create long-term sustainable value remains compelling. Now I'm just going to hand back to Nadia, who's hosting this, so that we can start the Q&A. Now in order to have an efficient call this morning, and given it is a quarter three trading update only, could I ask you initially to limit your questions to two per person? I know it's a big ask, and but we can go around again if there are remaining questions, and we haven't run out of time. Let's try that this time. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypads. If you choose to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure that your phone is unmuted locally. Our first question today comes from Jamie Rollo of Morgan Stanley. Jamie, please go ahead. Your line is open. Morning, Jamie, and Happy New Year. Morning, everyone. Happy New Year. Thanks, Alison. Just two from me, please. Just the first one on pricing. Your third quarter rate around 4% above the November 2019 quarter, and it looks like it's strengthened during the quarter despite the VAT increase. Could you talk a bit about what's happening out there in terms of sort of consumer acceptance, what your competitors are doing, your sort of confidence in pricing remaining robust? And secondly, the other question is just on the costs guidance. If you could please break down that sort of GBP 100 million into the various buckets, talk about some of the other discretionary items, some which were deferred, which, you know, so what the extra cost is there, please, and is there any sort of upside to that 7%-8% or is that really it, you think? Thank you. Great. Thanks, Jamie. I'll do the first question on pricing, and then I'll hand to Nicholas for the cost detail question. So yeah, on pricing, I think we probably talked about this the last time we spoke at the half year results, but just in terms of thinking ahead to pricing strategy going forward and into next year, given that there are, as you know, inflationary headwinds for the entire sector, this, we're not alone here. This is a sector-wide issue. Given the strength of demands that we saw, you know, post coming out of lockdown last year, and the summer before, we are pretty comfortable that we will have a pricing lever to be able to pull, and that we will see, you know. Well, of course, all of this is dependent on demand, but what we're expecting to see if I think holistically then about demand is leisure has stayed strong. It stayed strong through the Christmas period. I think we had an 80% occupancy rate on New Year's Eve, for example. Even though we have, you know, London and Edinburgh cancel their New Year's celebrations, I think a lot of people in the North moved South over the border and into places like Newcastle, and people in the West in Wales moved across the border into Bristol, and we had pretty full areas in those places. We're expecting leisure demand to be pretty buoyant and to come back first as it always does. For B2B, in terms of blue collar to stay resilient as it has throughout the entire last two years. The swing is the work from home order and the white collar workforce, which we had started to see a reasonably good return of actually. I would expect that if these restrictions are relatively short-term in nature, you know, certainly not expecting to see what we had last year, which is a closure for the whole of January to May, we're expecting, you know, to see more opening post the booster program of much earlier than we'd expect that bounce to be better with white collar because people have been used to doing that and going back. I think the area still where it's really hard to call is Central London, the very center of London, in terms of direction to inbound. We think demand will be good. We will obviously be testing continuously for how much of the independent sector may have decided to call it a day, and therefore, the opportunity that gives us to grow into that space and take share. We think we're still taking market share, by the way. We think that our pricing, where we expect demand to be good, our pricing will also be strong. We expect that to be a market phenomenon and our competitors will follow. Yeah. I think if you're in the independent sector, which is 50% of the market, you've got no option but to put your prices up with all the, they're not hedged on their electricity bill. They've got all the same inflation headwinds that we're seeing across the sector. Just in terms of the cost guidance overall, we talked about some of these over in the half one results overall. I mean, the biggest one overall is our biggest cost for us is our labor bill around GBP 500 million. We've put our wages up by about 5% in at the end of October overall, but we flagged at the time that we think we're gonna need to go higher at the moment. Now we're seeing retention has been improving. We're actually finding it a little bit better to recruit people at the moment, but this is the quiet time of year, so this is when we have the kind of lowest number of kind of hours worked. We are expecting as you get back into that kind of March, once the market picks back up again, once you get that kind of demand coming through, we expect again to see more pressure on kind of labor inflation overall. We're assuming that goes through as well. We're seeing, kind of, we talked about utilities before, which is about GBP 60 million of our business. We're expecting probably around about 10% inflation, 10%-12% inflation coming through for us. We're seeing kind of utility prices have almost doubled for the commodity part of it, but we're kind of fairly well hedged, which is why we've only been able to keep it to such low levels at the moment. The rest really, laundry is again probably one of the other big kind of costs for us as well. It's about GBP 40 million of the cost for us as well. That's kind of a fairly people-intensive business overall and revolves kind of heavily on the transport and drivers as well, which is where we're seeing kind of large inflation as well across the board. I think kind of in general, just across the kind of other areas like F&B, you know, I think it's been fairly well trailed by all the other kind of, in the newspapers and, you know, people who've gone out over the last, that you are starting to see that kind of inflation go through. We haven't seen it so far this year because we've been fairly well contracted, but that will go, we think that'll go up as you go into next year overall. They're the big buckets. Can I just follow up? Sorry, just on the discretionary cost point, Nicholas. We planned to spend about GBP 20 million mainly on refurbishment actually this year, a little bit on kind of the marketing for this quarter as well. Just with Omicron, though, because we've seen a kind of subdued sales, we've gone just kind of tempering our advertising spend for the moment and saving that up. The second thing, just with the kind of refurbishments and the kind of maintenance spend that we normally have, actually it's just the supply chain, just because, again, probably because of Omicron, it's just been a bit more tricky, actually. We just haven't been able to refurbish as many sites this quarter as we would do normally. Nothing that I'm concerned about at all, but just in terms of a timing issue, really. I meant the question was really for next year, that discretionary cost for 2023. Yes, so we talked about doing that, we talked about an increase in advertising, but we said at the H1 that additional advertising and refurbishment would be for this year and for next year. It stays in for next year. Okay, great. Thanks and best of luck with you all. Thank you. Thank you. Thanks, Jamie. Thank you. Our next question comes from James Ainley of Citi. James, please go ahead. Your line is open. Good morning. Yeah, good morning, everybody. Good morning. Two questions from me, please. First off, the Value Pub restaurants sector clearly been struggling relative to the broader industry. Can you sort of talk about why you think that is and how you might close the gap? Secondly, can I ask about the hotel industry supply trends in U.K. and Germany? Can you just comment on what you see in terms of construction activity and independent exits? I suppose scope for more single site acquisitions or even portfolio acquisitions, please. Yeah. Well, I'll kick off and Little, chip in and Hemant Patel might chip in as well on pubs and restaurants. Yes, I mean, we talked a little bit about this at the half year trading segment because you know, the bounce of leisure back was very much premium. There was a lot of wet led activity, so wet led pubs saw quite a big bounce back, and then quite a lot of premiumization. Your sort of gastro pub end and you know, seriously upmarket restaurants also, I think, saw quite a lot of bounce back. You know, there's some theory around that, around consumer behavior wanting a treat after such a long period of being locked up and people having, you know, some savings and therefore spending more on higher-end Premier activity. The value pub end was not doing as well and didn't come back as rapidly and we fall into that segment. You'll have heard us talk previously about a number of things that we've been doing to improve marketing, to improve digital marketing and to improve our menus and options and selections, all of which we are working on currently and launching as we go into the new year. We, you know, we're not sitting on our hands, but it isn't part of the business that's particularly vibrant at the moment, given that we are in a sort of partial restriction arrangement at the minute. Do you want to add anything, Hemant? Yeah. I'll give you only things I'd say on why it's taking longer for value guests to come back. There's been a structural change in terms of there's less discounting, although there might be margin accretive, but less discounting in the sector as well, means that the top line obviously comes down. Yeah, as Alison said, it's taken longer for value pub customers to come back. They tend to be an older demographic as well. Tends to be older, yeah. one of the reasons why it's taking longer for them to come back. Yeah, but I think those are two other very good points, the discounting and the demographic. As I said, very targeted in terms of new menus, high quality offering, and leveraging some of our digital marketing experience and doing some market-targeted marketing campaigns as we go into the new year or actually probably post this winter period and into the spring, more like. On the hotel supply trends, we haven't done any more work than we talked about last time. If you recall, last time we do a very detailed network plan which we will plan to do in 2022. Getting the timing right for that is very important. We don't want to do it early in the year. We want to do it at an appropriate moment. Because we have seen such an outperformance, you know, in terms of our own performance and that of other budget competitor, Travelodge, we did do a little survey, quite small sample, I think it was seven regional areas and four in London, where we looked at what had happened to the independent supply. We could see that there was definitely a sense that a number of independents have not reopened post-closure, and that there have been a contraction in the independent market, if that small sample proves to be typical of a broader phenomena. I mean, we think we can see some of those signs of distress, and I'm guessing that the emergence of Omicron and the additional restrictions we're now under with the work from home order particularly is not going to help with particularly relatively minimal government support. I suspect that will, if anything, exacerbate the situation. We will do a big broad study later in the year, which will give us a much clearer perspective on the speed at which the independents are falling out of the market. Anecdotally, there's very little new supply coming in both in the U.K. and in Germany. Which again is as you would expect it. Yeah. In terms of acquisition opportunities? For, if we're turning our attention to Germany is, I mean, significantly worse hit in terms of lockdown and government restrictions, and much more complicated array of very severe restrictions in Germany for much longer during this winter period. They were already lagging the U.K. in terms of the bounce back in demand. I would expect Germany to have to be, you know, more difficult for more months than the U.K. trajectory that I talked about a minute ago. That obviously won't help the very large and fragmented independent sector in Germany. The difference being, however, that there is still quite strong government support. That support is in place until the end of March through both grants and Kurzarbeit. That is allowing people to prolong, you know, and therefore we're not seeing as much movement in that market as potentially will happen in due course once that support falls away. Equally, we also haven't seen much in the way of changing pricing for property, which remains quite high. Again, acquisition of freehold in Germany is still quite difficult. That may change over time, but we've certainly not seen an early sign of it yet. Okay. Okay, very good. Thank you. Thank you. Best of luck in your new role, Nicholas. Thank you. Thank you. Our next question comes from Vicki Stern of Barclays. Vicki, please go ahead. Your line is open. Morning, Vicki. Good morning. Happy New Year. Yes, to you, too. Thanks. Just to follow on Germany. I was like, does anything about the lack of the recovery that we've seen, I suppose the contrast in performance with that market versus, say, the U.K. or the U.S., just make you feel a little bit more hesitant about the medium-term prospects there and sort of how much capital you'd want to deploy in the region? Or you think this is really just, you know, short term, as you say, a few months kind of lag and then back fully on course. Sort of related to that, do you think it's still then feasible that you could see this business break even by 2024? Just a quick one on real estate. You'll see, sort of reference to few transactions that have taken place, last year that sort of seemed to underscore the previous asset value. I'm just wondering if you are planning on sort of getting another broader, bigger revaluation of the property done, and if so, sort of when? Thanks. Yeah. Let's start. I'll start with Germany and pass to real estate for Nicholas. He might add in a few words on breakeven as well, Nicholas. We haven't got a diminished sense of excitement about the German market. All the things that made it a great market for us, specifically for us, you know, the fit with our own model into the structural fit within Germany is still excellent. All of those underpinning reasons for us to be confident about Germany remain, plus a bit of extra confidence. You know, it's still a big market. It's still highly fragmented. It's 73% independent. Those independents have started to be in decline. There isn't a dominant player. You know, there's still great opportunity for us to be the number one player in Germany and to replicate the platform that we operate in the U.K., which is so strong in that other market. Lots of reasons to be very positive. Of course, with some incremental reasons, which is that we have been trading now in Germany, albeit pre-COVID only with a handful of hotels and only 2 for a period. The brand has gone down very well with the consumers of the product. The product itself is very, very well thought of, and our guest scores are absolutely excellent. We have been trading, even with a larger number of hotels, at market levels of occupancy. We do think Germany will, you know, just be more problematic to come out of this crisis, given where they are and how they've managed, how they manage vaccination, et cetera. But we think it is short term, and we're very confident about the medium-term outlook. In terms of breakeven, it's never really our target here. I just know it is in terms of how people need to think about valuing the business and wanting to know when they've got a valuation against a cashflow or an operational profit or a breakeven. The more we grow, the more potentially you push back breakeven. We're actually quite keen still to grow, if we can. Yes, we could see our way clear to reaching breakeven in the same timeframe as we've previously spoke about, Vicki, which is 2024. That will depend on what we manage to do in terms of incremental growth. Things can change. What we'll try and do, and we've talked about this before, and it wasn't appropriate for a Q3 trading update. When we get to the year end, we'll try and start to be able to articulate, you know, the operating profit and the way that the sites are maturing in a more sensible way, so that people can think about the way that they value the business as it grows. Sorry, just back on the valuation. Yes, we talked about in the half one results that we had seen some transactions in the marketplace, property transactions of leasehold sites. They were at reasonable yields, fairly similar to the valuation that we did in late 2018 as well. We were just giving an indication that on that basis, the valuation looks like it was holding up quite well. There's been very few transactions though, and even less so, again, in the wider hotel market at the moment. Most of the hotels that have been sold have been kind of distressed sales, so you haven't seen those sort of yields being maintained right across the board at the moment. I think it's probably too early still to kind of do a valuation that I think would be useful overall. We haven't got one planned at the moment. As you know, Vicki, we're always open-minded to do it. I think we'd like to see a little bit more kind of evidence in the marketplace that those are being sustained before we even thought about doing that at the moment. I think we overall, I think, you know, what, if you stand back looking at our, you know, the strength of the brand, the strength of our kind of covenants overall, you know, we don't see a big reason why the valuation of our property would have declined significantly. Very helpful. Thanks. Thanks, Vicki. Thank you. Our next question comes from Bilal Aziz of UBS. Bilal, please go ahead. Your line is open. Good morning. Morning, everyone. Happy New Year. Just one from my side, please. I think around about this time last year, or maybe slightly later actually, and you mentioned the step towards travel management companies. Perhaps just a bit of an update there. How are you progressing? What has that done for you so far? And expectations, please. Thank you. Yeah. We did talk about travel, adding travel management companies into our repertoire of distribution. For those that don't recall it, I know you do 'cause you've asked the question, but for those that don't, you'll recall that we view travel management companies being quite different essentially to booking.com or Expedia or other forms of commission-based travel agency because they reach a consumer we couldn't reach without them. Because if you're using a travel management company 'cause you work for a large corporate particularly, you're not allowed to book directly, and you can only use that travel management company. The idea is that it doesn't cannibalize in the way that using an online travel agent just cannibalizes business which would otherwise have come to us anyway without the commission. Yes, we were exploring that. We also thought that if there were going to be some sort of more structural reduction in white collar travel, which is about 25% of our business, that we would be able to offset that with increasing our distribution into a platform of travel management companies that we have not previously participated in. We've made quite good progress on this in that we have signed up quite a number of travel management companies now and in some cases linked technology where we have to link technology. We've got a pretty good platform. What we're waiting for, however, is for the white collar and international travel to return because that's predominantly where travel management companies are playing. Because they have been the last of the cohorts that we talk about to return, we haven't really seen yet the upside benefit that we would be expecting once we get a full recovery of business travel and international travel. We're set up for it, but we haven't yet seen the benefit in the numbers. Great. Thank you. Yeah. Answers the question. Thank you. Our next question comes from Tim Barrett of Numis. Tim, please go ahead. Your line is open. Morning, everybody. Two things, please. Just to come back on that pricing question for the current financial year. Is it the case that you're still targeting the main target is occupancy in the low 80s and that your algorithms are solving for that, but you just anticipate they're consistent with higher average room rate? And then secondly, on pub restaurants, obviously we talked a bit about the -17%, anecdotes in the market would suggest that was very lumpy at the market, particularly the couple of weeks pre-Christmas. I know you don't want to give weekly out for that, but is that your experience as well? Thanks a lot. Okay. I'll we'll do a one and two bit on this again. Pricing. I mean, as a company, you know we like to be full and to have good occupancy and not least because actually economically, it plays out too well for you to be fully occupied and for your brand to be well known, and it plays out in lots of other different ways if people are continuously using you and remain loyal to you. The pricing I think is a lot more sophisticated than that and really has had to be because algorithms don't work in a period where, you know, post a dislocation like COVID in the way that they would historically have. They're just not as smooth to operate because they haven't got the same depth and level of previous experiences, which is what an algorithm works off. Actually there is quite a lot of intervention required on pricing. An example of that would be, of course we want to be occupied, well occupied, but in some places we know that we will be full. Although there's been a lot of movement to short-term booking and less visibility on long-term booking than there was pre-COVID, for obvious reasons, 'cause life's uncertain and people don't want to book too far in advance and then have to cancel their plans, so they're generally planning things at shorter time horizons. We, you know, where we know that we're gonna have a full hotel, we have to hold our nerve. We don't, you know, we're not starting prices as low and going up very slowly up ladders. We're hoping higher prices at opening and waiting for that demand to come in because we've seen that we've got shorter lead times to deal with. I mean, a good example of this would be I myself attempting to book the Newquay Premier Inn for next summer because my daughter is gonna be down there and I thought it might be handy to have a backup plan. I guess she's only 17 'cause she's going to the Boardmasters Festival. I can tell you I looked at our site in Newquay. It is wonderful if you're thinking about a sandy holiday. It's right on the beach, on Fistral Beach, so it's a fantastic location. However, it is maximum price all the way through. We, you know, we're not on a ladder at that site and certainly not for the Boardmasters Festival. For some things, where we know, however, that demand is going to be sluggish or low or that we might not fill, I think our job is to make sure we take every penny of the market, of the available market and leave our competitors with the least amount. If that means starting prices lower for in areas of weaker demand to maximize the occupancy to make sure we get every bit of that occupancy, then I think that that's a good strategy for those areas. We are much more filleting the estate into our assessment of demand, on managing pricing in that way. I hope that makes sense, Tim. Mm-hmm. Yeah. On the pub side, lumpy, I wouldn't necessarily call it lumpy. I mean, what we saw coming into Christmas as soon as Omicron was kind of getting a head of steam, we saw you know, parties, group parties, office parties being canceled across the whole of the sector, not just with us. We saw it fall off quite immediately. It was a good Christmas Day, so people felt like people were kind of staying out of the way, keeping themselves locked down. When it came to actually celebrating the kind of Christmas Day, it was a good day overall. I think that was not just us again, but it was the whole market as well. I think you're likely to see that until the government really announces, you know, the end of Plan B. I think you're gonna see kind of quite a suppressed market overall, particularly at the value end where, you know, where people who eat in the value kind of segment of people probably hit the hardest by the impact of the virus overall. Okay, brilliant. Thanks for the travel tips. That was my sales pitch for Premier Inn Newquay. Okay, thank you. Our next question comes from Jaafar Mestari of Exane BNP Paribas. Jaffar, please go ahead. Your line is open. Hello, good morning. Morning, everyone. Morning. Morning. Hi. Just possibly on the pricing mix, you've just alluded to that. Okay, the net for the group is single digit positive pricing. In the October presentation, you showed us some KPIs for two types of properties. There were areas of high demand like Cornwall, where pricing can be up +60%. There's areas of low demand like Glasgow, where pricing this summer went down as much as -28%. You know, beyond the net, I'm just curious how you expect these two buckets to trend into full year 2023 when you say pricing should be, should show further improvement. Do you think some of those locations can realistically stay at +60, or do you expect those to cool off? How much do the laggards need to improve to produce that net, the positive at the group level, if that makes sense? Yeah. I mean, it is a mixed bag. You know, when I look at you know, how occupancy moved this year through the quarters, you know, regions you know, ran ahead of London, for example. Then I look at some of the occupancy, actually, outer London was actually quite strong. It really was central London. You know, there will be real mixes with, as you said, within the estate. One of the things that we've spent a lot of time on in the last 18 months is making sure we understand the dynamics catchment by catchment and type of property by type of property so that we can manage to optimize that mix. We are expecting to see a good, you know, a good ability to price better across on, you know, on a net basis across the business. Albeit you are right, there will be pockets of areas. London, Central London, for example, you know, never even at quarter three, we were sort of high 70% occupancy. But in the regions, we were in the 80s. Very strong both occupancy and room rate growth in the regions, and slightly weaker in London. You are right, there will be pockets. But overall, I think we are pretty positive that we will have some strength in pricing on a net basis for the whole group. Thank you. You're saying some of those will price lower if the cost goes down? Potentially. Yeah. Particularly places like Central London, as you say. You know, we haven't seen that pick up lately. You know, but if you see a pick up, we'll react to it, you know. Thank you. Thanks. Thanks, Jaffar. Thank you. Our next question comes from Joe Thomas of HSBC. Joe, please go ahead. Your line is open. Morning. Good morning. Good morning. Thanks for taking the questions. Just on the F&B, I should say. Could you just perhaps give a bit more granularity on how you've done on the, you know, F&B that's attached to the hotels versus the sort of standalone side? Secondly, as you just sort of consider the value food end of the market, are you still strategically convinced that you want to be playing there to the same extent? Or is there any potential perhaps to reconfigure the estate as we are seeing one or two operators doing right now? Thank you. Okay. Good questions. The first one is we don't really have any left standalone pub restaurants in the estate. I mean, if we have, it's a handful, five or six, something like that. We can't, you know, there's no reason to wait to make that comparison. Every you know, pretty much apart from, as I said, maybe a handful of standalones, we mostly we've disposed of all of our standalone pub restaurants. The pub restaurants and the solus restaurants within hotels all serve a hotel, are attached to a hotel and serve a hotel. But I don't know how else to answer question one. If you've got a follow-up, then ask me at the end. In terms of, we spend a lot of time every year considering what the right models are for us to operate. Indeed, we think about what models to operate in individual sites when we refurbish sites and when we build new properties. What we do know, and even from quite recent data, recent review of data, post-COVID, what we do know is F&B is incredibly important to a Premier Inn guest, particularly breakfast. Breakfast more so than dinner, but dinner is still important. It's a critical part of the proposition, and it distinguishes from other parts of the market that might compete with us and makes us the popular and number one brand that we are. It distinguishes us from traditional competitors like Travelodge, who have got less good an F&B offer, and it distinguishes from new entrants like Airbnb, who don't have an F&B offer either. It's important for quite a large number of people who stay with us. We can measure some of that importance in the RevPAR that it produces for the hotel. We've had lots of trials where we've removed F&B, had different formats for F&B, had breakfast rooms instead of full restaurants, et cetera. We're able, therefore, to distinguish which formats work for us. It's always important to remember when we're thinking about restaurant performance that what it doesn't reflect and what's hard to reflect is the additional revenue, occupancy, and rates that we obtain in the adjoining hotel by having the F&B offer on site, and supporting it. When we're considering what we want to do in the future, and we do often review our strategy on F&B, it's not an infrequent question that we ask ourselves. We always have to remember that the risk you take by not doing F&B, and particularly not offering a great breakfast, is significant in RevPAR. That's certainly RevPAR that we don't want to lose. We're able to look at things, for example, like what's the difference between a COLO where somebody else operates the restaurant for us and our own performance. Our own performance gives us a significant RevPAR advantage over a COLO, over somebody else operating for us. I guess you would expect that, given that particularly for breakfast, other operators are not so interested in offering a great breakfast and serving sort of Premier Inn guests breakfast because it doesn't make the sort of return that they would prefer to see, which they see in wet-led activity and lunch and dinner activity. Yes, I guess the short answer is yes, we do review it. Yes, we do look at it carefully. At least every 18 months to two years, we have a full review, and we do look at it in the round in terms of the whole P&L rather than just on the restaurant side because of the link between the two. Thanks. Thank you. Thank you. Right. Our next question comes from Alex Brignall of Redburn. Alex, please go ahead. Your line is open. Good morning, guys. Happy New Year. I've got two questions, please. The first one is on RevPAR into your FY 2023 or calendar 2022. Just the comment about U.K. versus Germany being a little bit behind. I guess I wonder whether you could give some commentary on the impact of outbound travel restrictions on that because German outbound travel is significantly higher than it is in the U.K. I wonder whether if outbound travel restrictions loosen in the U.K., then that might have a dragging impact on RevPAR in the U.K. as it most probably had in Germany and maybe sort of, you know, exposures to things that would be affected by that would be hugely helpful. The second question, and I think you spoke about this, maybe at the last call, was on supply and the lack of competition that you're seeing for new sites. We're seeing that from the other franchisors signing levels are very low. I wonder if you could just give us an update on that and what competition you're seeing for any new sites and the levels of new construction that you're seeing from people other than yourselves. Thank you so much. RevPAR into calendar year 2022 was the- Yeah, I think the question was, is German outbound higher than in the U.K. I think it's relatively. I wouldn't say that's a big impact. We're a domestic player mainly, particularly in Germany, where business to business is higher than it is in the U.K. I don't think that's a really large factor. A couple of things, I guess. As Nicholas just said, for both markets, you know, one of the things we do well is domestic budget, and that's what we are targeting in both markets. Both markets have very large internal domestic travel markets. Those are the markets that we tap into and play into. We don't tap into particularly inbound. I mean, Central London obviously has a trickle-down effect from it, but it's probably about 10% of our business, in inbound. That will be true in Germany as well. In terms of Germany being behind the U.K., though, because I think that was at the sort of core of the question, they've been behind in recovery terms for the whole of the COVID crisis. They always seem to lag a few months behind, and then they sort of go into lockdown at the same time as we do, but so they never come quite out of it, in the same way that we do. It's quite complex in Germany. For those of you don't know, whilst at the moment our restrictions here are broadly, you know, work from home if you can, wear a mask, and you know, express some caution. I guess in Scotland and Wales and Northern Ireland, some slightly additional things around how many households can meet and et cetera. In Germany, it's a very complex arrangement by federal state, and it's much more of a lockdown than in the U.K. That's why we think it will take them longer to come out. They'll probably lag us by three months, as we think they've lagged us all the way through by three months. Their booster and vaccination rates are still nowhere near as high as ours. They have now split and started to bring in restrictions so that actually, for example, in some states, you cannot travel for leisure at all unless you're fully vaccinated. They've started to bring in restrictions which do target the unvaccinated population. It's complex to operate in Germany. It's a complex structure and picture to operate within. We do still think it will fall into the same category in that this too will end, and we will learn to live with COVID as an endemic issue rather than as a pandemic issue, and that Germany is a strong domestic market that we will play in domestically. I'm not sure whether we sort of captured the essence of your question, but follow up if we haven't. If we move on to supply Yes. Supply, as you said earlier, just we're seeing very little new supply coming into the marketplace, overall, both from independents but also from the branded players as well. Travelodge have got a little bit opening this year, but we can't see very much opening into next year other than that stuff that they've already pre-signed. I think your question was about, obviously, competition for sites. We don't really see competition for the sites that we want versus other hotels. It's usually for alternative use. It's either, you know, the main competition we have is for office or residential, for the sites we're having. We're not coming across other hotel chains really in our market at the moment. which is exactly what we saw the last time there was a downturn. You just get this kind of three to four year break in new supply coming into the market. Thank you. I think I asked my first question in a highly convoluted way, or at least that's how it was interpreted. My real question was, does outbound travel not affect domestic demand? That the pricing you talked about in beauty might be somewhat lower if everyone's allowed to go to Spain. My point about Germany- Oh, yes. I'm with you. Okay. My point- I now- My point. I understand that question. Okay. Thank you for asking it again. Yeah, of course. I mean, we've had, I'm sure you know, there's been lots of debate and discussion over the last two summers, I guess, about staycation boom. The question is, you know, was it a staycation boom? You know, will we get it to continue for next year and the year after? I mean, the signs are that overseas travel, of course, will reopen. It's going to be quite expensive. You can already see that from the prices of both accommodation overseas, but holidays overseas and airline travel. Airline capacity is in itself in some ways constrained because there's been a lot of capacity come out of airlines. Therefore, the prices will be higher. I suspect there will still be a strong demand, either people who don't want to travel to stay in the U.K. or for whom travel abroad is actually quite expensive to stay in the U.K. We are quite positive about it. Bear in mind, however, we don't predicate all of Premier Inn business on staycation, in that we have probably, you know, places that are bucket and spade holiday destinations, probably about 15% of our business. You know, it is about broad demand returning across the U.K. for lots of different events and leisure. We're mostly a short-term destination, not a two-week holiday destination hotel group as you'd imagine. What we saw last year and continue to see all the way through quarter three and into quarter four, even post-Omicron, were people wanting to travel to see family and friends, go to events and do special things. We're expecting that sort of leisure behavior to be just as prominent next year as it has been this year. Brilliant. Thank you very much. Sorry for making you answer the question twice. No worries. Thank you. Our next question comes from Stuart Gordon of Berenberg. Stuart, please, your line is open. Yeah. Good morning. Good morning, guys. Just to help a little bit as we move forward, there's been a lot of moving parts in the last few years, obviously. What kind of RevPAR incrementally increase on 2020 do you think we need to see to get PBT in the U.K. back to the GBP 415 it was in 2020? 'Cause obviously we've had a significant move in terms of some of the cost savings you've done, but also in the inflationary pressures. Thanks. Yeah, good questions, Stuart. I guess I feel we've given you quite good guidance in our cost base now. If we gave you guidance on our RevPAR, we might as well tell you what we think for the whole thing. I'm not gonna give specifics on that overall, Stuart, because I think you know, it's the Omicron variant. What we do know is it is bumpy along the way. We've given you kind of guidance that we think for this coming year, coming up, that we'll get back to like-for-like positive sometime during the year. That that's where we are in terms of where our forward guidance is at the moment. Yeah, on margins, which is the other side of that coin, we've purposefully shied away from giving new guidance on when we think margin. If you remember originally- Yeah. We thought we would get our revenue back to pre-COVID levels by 2023, and the margin would come back the year after in 2024. We've brought in the guidance for the top line by a year into next year. In fact, we've been trading at some point this year, you know, ahead of pre-COVID levels. We're still, you know, being quite cautious about where the inflationary pressure comes and the scope and nature of our pricing and cost efficiency program, and therefore when essentially we'll get the margin back. We haven't formally changed our guidance at all, but we're probably not going to. We'll have a better sense when we get to the full year results in April. Okay, thanks so much. Very well, love to be more helpful to you. That's okay. Thank you. Our next question comes from Paul Ruddy of Goodbody. Paul, please go ahead. Your line is open. Hi. Hi. Morning. Yes. Morning. It's actually a bit of a follow-up from that question, and you've clarified some of it. Just on that medium-term margin recovery, and your kind of continued confidence. Obviously here, what you're kind of saying on timing. Just some of the assumptions in that, you know, reiterating that margin, you know, recovered margin guidance. Is that mostly around your confidence in pricing dynamics and in demand in the medium term? Or is there some assumption around some of the cost inflation we're seeing being transitory? It just seems like there's an awful lot more inflation in the system now than when you initially made those remarks. Yeah. I think probably the change from where we made those remarks is probably a bit more confidence in being able to pass some of the price on. It's a number of things. I guess it's the benefit from the growth of the estate that we've got, the market share benefits we're gonna get, we think from the independent market declining, which gives us more kind of ability to, you know, build our occupancy and both our pricing over that period of time. It's both a combination of those things, plus the efficiency program which we announced and is still the same as we announced it back in October. Okay, thank you. Thank you, Paul. As a final reminder, that's star followed by one if you would like to ask a question today. Our final question at the moment comes from Ivor Jones of Peel Hunt. Ivor, please go ahead. Your line is open. Morning, Ivo. Morning. Happy New Year. Thank you. Happy New Year to you. I guess picking up on a bit of the last two questions really. I've been thinking about the route to 110,000 rooms and the projected return on the capital required to get there. You've talked a lot about what feel like some structural increase in costs. Construction costs feel like they're up, raw materials for construction, et cetera. Is that plan under review, either in terms of quantum or location of where those new sites are going to be? Or in terms of the projected return on capital, are the cost changes offset by your projected revenue changes? Thanks. Okay. Yeah, no, that's a good question. And I'll answer it in a couple of parts. First, we've talked a little bit before. You'll have heard us talk about the network planning that we do every couple of years. We're due to do a network plan this year. The network, every time we do a network plan, the landscape's changed. What doesn't generally change is where you might need a new hotel, which is in a virgin catchment, because generally a virgin stays a virgin catchment. i.e., a place where we haven't currently got a hotel. What has historically often happened when we do the network planning exercise, and this is pre my time and my predecessor's time when network planning was done, is often the runway is extended. The runway is often extended because the independent sector has continued to decline, and therefore allowed for growth, and maybe other competitive elements in the landscape have changed, or our brands got better, or our performance is better. We do a network plan to make sure that where we think there will be demand for a hotel and where we think supply is there, including, you know, removing demand that Airbnb would take from a catchment, that we understand that at a very granular level, down to about 4,000 postcodes level, so really granular. We understand exactly what the supply landscape looks like, which involves, you know, actually a big exercise in establishing if independents really have left the market, whether they're still trading or not trading at all, and in what quantity, and what new build is going in, what new supply has got planning permission or is being purported to be moving into a market. That gives us the runway that we then, you know, give a sense to the market of what we think that. We de-risk that a bit, and then we give a sense to the market what it looks like. We don't tell you the number as it comes out raw, 'cause we don't wanna put into the market you know any sort of false expectations, so we do a bit of de-risking. That's where the 110,000 has come from, and we will do a new network plan this year, and it tells us where very specifically we want our new hotels to be. It is based on you know on us having a really good model. Then when we come to put hotels in, we are very rigorous about the model that we use to assess the returns profile over time and the NPV of the property. That is updated with a huge amount of regularity, at least six monthly, but we in periods of high inflation more often, so that we are, you know, certainly not kidding ourselves. Every single site that we sign up to is individually assessed and has to hit hurdle, and that hurdle is, you know, akin to our current returns. What we don't want is to open new hotels and have declining returns profile. We're not looking to open until we hit WACC, for example. We want to maintain a WACC plus returns profile for investors. The other thing we then do, once every six months is we review all capital that's been spent over the previous five or six years, and we make sure that its returns have produced the outcome we thought they first would, and we adjust models. If they haven't, we understand why, and what's happened, and we make sure we adjust models so that we, you know, perpetuate any issues. Finally, the final point on this one is, because of COVID, we scrubbed our entire pipeline, and so we've continued where we signed new pipeline to have, a weaker projection on the top line, a, you know, later return to demand, so which obviously impacts the NPV. We've included all inflationary costs in terms of development costs and cost of rent, et cetera, within the model. We scrubbed our pipeline and removed properties which no longer hit hurdle when we put in the impact of COVID, so where we could, which to a large extent we could. We're quite confident that the pipeline we currently have is robust and meets its returns hurdles and will be a you know a good pipeline to open over a period of time. When we do the network plan, we'll then have the future runway, which depend... What will be impacted, that runway, for example, would extend if we do see that the independent sector falls out more rapidly than it has been doing at its, you know, standard 1% a year, which is what we think possibly will be happening. I don't know whether that answers all your questions, quite holistic in terms of all the things that we do in this area. That's really helpful setting out the framework. It did make me wonder, though, if there is to be a structural decline in white-collar demand as a result of working from home, would that affect plans for London more than the provinces? Would we see a change in geographic skew? It's possible. I mean, certainly during the pandemic, we've seen the weakness in London, and that's about. Also, it's not just about domestic working from home. Funnily enough, we've seen quite a buoyant amount come back from a domestic perspective. I mean, people have changed their working practices. So actually, where some demand's fallen away, some has arrived. Some of you may recognize this, but we do have people who now come into big cities for a couple of days a week and stay with us, you know, that would previously have commuted, but they've moved out further away. So they now come in and stay for a couple of days, and then they work from home for a couple of days. So actually, we've seen some demand we didn't use to have come back. I think there's a bit of trailing and leading in it. Certainly London is not just about domestic travel. Actually, without inbound, the inbound business and leisure travel into London has remained incredibly weak. How much of that comes back and how that remains to be seen and could well be a weakness. That'll be reflected in the work that we do and certainly in our view. As you know, we have lower market share in London than our general market share. We're not in any form of overcapacity in London for sure. Thank you very much. Thank you. We currently have no further questions. I'll hand the call back over to you, Alison, for any closing remarks. Yep. Just want to say a big thank you to everybody for being on the call. If you've got any follow-up calls, we'd be delighted to help, so please do come through to the IR team. Thank you, Nicholas, for helping me choreograph that Q&A session. Always a pleasure. Yeah. Thanks, everybody. Take care. Have a good day. Thank you, ladies and gentlemen. This concludes today's call. Thank you all for joining. You may now disconnect your lines.