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Whitbread, owner of Premier Inn, has announced plans to cut about 3,800 jobs in the UK and Ireland as part of a new five-year strategy to achieve £250 million in cost savings.

The hospitality group cited cost pressures from business rates and national insurance contributions as a key driver for the move.

Its new five-year plan includes the increased cost-saving target and steps to cut capital spending by more than £1 billion.

Whitbread will sell off £1.5 billion worth of its freehold properties – meaning the hotels it owns outright – to “fund future growth and increasingly look to grow on a leasehold basis” and replace its 197 restaurants with an integrated food and drink model, deemed more efficient and preferred by hotel guests.

The group owns restaurant chains including Beefeater, Bar + Block and Brewers Fayre.

Whitbread said the plans to reduce its 30,000-strong workforce were subject to employee consultation, and that it expects to retain a significant proportion of those affected through redeployment.

The company’s previous restructuring plan, launched in 2024, resulted in around 1,500 job cuts.

It is still planning to increase the number of hotel rooms it has open to 96,000 by the 2031 financial year, from the current number of approximately 86,600.

Chief executive Dominic Paul said: “We always challenge ourselves to improve and, in light of significant cost increases in the form of business rates and national insurance, as well as the implied market discount to our inherent value, we’ve looked hard at the options open to us to maximise value creation over the medium and long-term.

“This has been a rigorous process, and we’ve approached all options with an open mind.

“Our new five-year plan builds on our strengths and drives a significant acceleration of our strategy.”

He added: “This plan will transform Whitbread into a higher-margin, higher-returning pure-play hotel business.

“We’re going to go further and faster to deliver a great experience for our guests and high-quality growth and returns for our shareholders.”

It comes after the business reported a pre-tax profit of £298 million for the year to February 26, which was 19 per cent lower than the year before.

Total revenues were flat year-on-year at £2.9 billion, but UK sales edged up by one per cent.