Premier Inn owner Whitbread is axing 1,500 jobs in a cost-cutting plan which aims to deliver £150m of cost savings over the next three years and boost its returns to shareholders.

The group, which also owns restaurants including Brewers Fayre and Beefeater, said the job losses are still subject to consultation and will come from its total UK workforce of 37,000 employees.

It said the move was part of an expansion plan which will cut its restaurant chain by more than 200 and concentrate on opening more hotel rooms instead.

Whitbread said it plans to sell 126 of its less profitable branded restaurants, with 21 sales already been agreed. It also wants to convert 112 restaurants into new hotel rooms. It said the expansion aims to put it in a position to be able to offer at least 97,000 rooms in the UK by 2029.

The proposals to boost profits come as it announced overall profit before tax was up by 21 per cent to £452m driven overwhelmingly by Premier Inn accomodation revenues (up 13%) with the hotel chain offering economic and reliable places for both leisure and business customers to stay in the post pandemic period.

The company, which operates more than 840 hotels across the UK and Germany, has enjoyed increased prices for its hotel rooms after many independent hotels were unable to bounce back after the pandemic, constricting supply. In Germany, Premier Inn grew its sales by 62 per cent, narrowing its losses to £36m from £50m.

It has also benefitted from the staycation trend which has seen Britons spend more time in  UK holiday hotspots rather than travelling abroad. Rising food inflation has seen fewer people dine out on a regular basis resulting in many restaurant chains being forced to close.

The company said while these plans are still subject to consultation, they were hopeful of finding alternative opportunities ‘wherever possible’ through the roles created by the changes. “We expect to retain a significant proportion of those affected who wish to remain with us and we will be providing dedicated support to our teams,” Whitbread said.

The group also announced plans to start a new £150m share buyback.