Whitbread has reported a rise in group sales and said forward bookings remained ahead of last year in the first quarter.

The Premier Inn owner said its hotel business continued to outperform the market even as it looks to cut costs in the face of sharp tax increases.

Total sales at Premier Inn UK rose by three per cent in the 13 weeks to 28 May, compared to the previous year, while total revenue per room edged up by two per cent.

It said the business ‘continued to outperform the midscale and economy market’ as total accommodation sales grew by one percentage point.

Trading was strongest in London, where accommodation sales jumped seven per cent, and revenue per available room rose by 4 per cent. In the regions, both measures were up 1 per cent.

Chief executive Dominic Paul said: 'We delivered a strong and improved performance in the first quarter. In the UK, driven by the strength of our brand and commercial programme, total accommodation sales and RevPAR continued to grow ahead of the wider market.'

In April, Whitbread outlined plans to axe 3,800 jobs, overhaul its restaurants and sell some of its hotels to make £250million in cost savings over five years. It followed a review that began after the last Budget, when hotels were hit with sharp increases in business rates.

In its update this morning, Whitbread said total group sales rose two per cent to £727million. Positive trading performance across both Premier Inn UK and Premier Inn Germany was partially offset by an expected reduction in its UK food and beverage arm.

As part of its new strategy, Whitbread will convert 87 of its Beefeater and Brewers Fayre restaurants into Premier Inn hotel rooms and sell 110 over the next two years.

It came as food and drink sales fell five per cent to £148million in the three months to the end of May, against a three per cent rise in accommodation revenue to £498million.

Revenue per available room, a key industry measure of hotel performance, increased by 2 per cent across the group's UK accommodation arm.

Paul said forward bookings in both the UK and Germany were ahead of last year, bolstered by 'strong leisure demand', giving the group confidence in its outlook.

Shares in Whitbread fell 0.33 per cent or 8.00p to 2,388.00p on Thursday morning, having fallen 14 per cent in the past year.

Derren Nathan, an analyst at Hargreaves Lansdown, said: 'Whitbread continues to outperform the wider hotels market, and once the planned scale-back in its food and beverage operations washes through, this should become more apparent in its headline financials.

'Today’s figures should go down well, and looking ahead, strong bookings and the de-escalation of geopolitical tensions paint a positive backdrop.'