Whitbread, the owner of Premier Inn hotels, plans to cut 1,500 jobs, representing about 4% of its total UK workforce.
The job cuts align with the budget hotel group's plan to close 126 branded restaurants over the next two years. The group has already agreed to sell 21 of these restaurants for £28 million.
In the 2024 fiscal year, which ended on 29 February, the 126 restaurants produced a revenue of £147 million but incurred a loss before tax of £9 million.
The group plans to convert 112 branded restaurants into new hotel rooms within the next 24 months.
The announcement comes after reports in March indicating that Whitbread was considering selling or converting about a third of its Beefeater and Brewers Fayre pubs.
Whitbread said the strategy would 'help fund our investment in building a more tailored, integrated restaurant in our hotels as well as the construction of new hotel rooms across the estate'.
Whitbread estimates that it will require an investment of £500 million over the next four years to support its expansion plans.
It warned 1,500 roles out of 37,000 are now at risk, and added: 'We will seek to find alternative opportunities wherever possible through the roles created by this plan and our existing recruitment process.'
In its 2024 fiscal year results announced earlier this week, Whitbread reported a 19% increase in pre-tax profits to £588 million, while revenue per available room (RevPAR) grew by 10% to £65.56.
Food and beverage (F&B) sales increased by 7% compared to FY23, bolstered by high occupancy rates and strong breakfast sales, which saw a 14% year-on-year growth.
During the period, Whitbread added over 2,000 new hotel rooms and achieved a 12% increase in total UK accommodation sales. This growth was driven by significant increases in both London (+17%) and regional areas (+10%).
The group also announced plans to initiate a share buyback programme valued at £150 million.
Dominic Paul, chief executive of Whitbread, said: 'Our freehold-backed balance sheet, together with our strategy of continuing to invest, is allowing us to take advantage of the significant structural growth opportunity that exists following the decline in UK hotel supply.
'Against this backdrop, we are increasing our momentum to deliver long-term profitable growth. In addition to our strong commercial programme, we plan to optimise our F&B offer at a number of our sites to unlock up to 3,500 room extensions that will enhance the service for our hotel guests and deliver increased operational efficiencies.'
He added: 'We recognise that our transition will impact some of our team members so we will be providing support throughout this process and we are committed to working hard to enable as many as possible of those affected to remain with us.'
Whitbread's Premier Inn holds the the UK's largest hotel group, with around 12% market share of total hotel room supply.Within the UK, Premier Inn operates over 85,000 rooms spread across 853 hotels, employing a workforce of 37,000 staff members.