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Birmingham Post

Business

Jon Robinson

Britannia Hotels: UK's 'worst chain' cut almost 1,000 jobs as losses neared £10m

Britannia Hotel Britannia Britannia Hotels United Kingdom Covid-19 Pandemic Bournemouth Grand Hotel Manchester

Almost 1,000 jobs were cut by Britannia Hotels as it lost nearly £10m and its turnover slumped by more than £80m during its latest financial year. The chain has been ranked the worst in the UK for nine years in a row.

According to newly-filed documents with Companies House, the Cheshire-headquartered business posted a pre-tax loss of £9.5m for the 12 months to March 31, 2021, compared to a profit of £13.7m in the prior year.

Its turnover also fell from £120.4m to £38.3m over the same period.

When the company revealed its accounts for the 12 months to March 31, 2020, it said it was "likely" to post a loss for the following year.

The documents also show the number of employees was cut from 2,740 to 1,765 during the 12-month period, with office and management staff reducing by 62 and direct workers falling by 913.

The latest results come after the chain was ranked as the worst hotel chain in the UK for a ninth consecutive year, according to an annual survey by consumer group Which?.

Britannia, which has 61 hotels across the UK, came bottom of the pile after receiving an average customer score of only 49%.

More than half (51%) of Britannia guests surveyed said they ran into a problem during their stay, with cleanliness being the most common issue.

The chain was rated one star out of five for bathrooms, and two stars for seven other categories such as cleanliness, customer service and value for money.

A statement signed off by the board said: "Sales have reduced 68% for the year. This reflects the impact Covid-19 has had on performance and the trading conditions throughout the economy in 2021.

"The gross margin achieved for the year equated to 47.4% (2020: 61.9%). Again this significant drop in margin reflects the trading conditions since the onset of the Covid=19 pandemic.

"Our priority continually remains to maintain occupancy levels and manage operating costs so that the business is well placed to exploit further investment in new properties.

"The hotel industry in the UK is becoming increasingly competitive and this brings an increased risk of losing major sales accounts to competitors.

"The company manages to control this risk by adding improved services whilst retaining highly competitive prices and maintaining good customer relationships.

"Demand for hotel services can be affected by the general economic conditions in the country as well as the impact of the Covid-19 pandemic.

"We ensure that we retain the necessary flexibili8ty not only on our prices in order to respond to market conditions but also to allow us to adapt and overcome the ever evolving challenges of operating hotels in the current socio-economic environment.

"In addition, we employ tight controls on our costs, particularly labour costs, in order to ensure that the company maintains its competitive position."

On its outlook, the company added: "The directors remain confident that the company is in a good position to meet the challenges an opportunities of the future.

"The hotels have managed to maintain their competitive edge through the economic downturn and continue to take steps designed to attract new business and improve market share going forward.

"The directors have carefully considered the availability of working capital and likely levels of trading over the next 12 months.

"They are confident that the business is well placed to meet the challenges including the current geopolitical uncertainty, cost of living crisis and the continuing impact of the Covid-19 pandemic."