Whitbread, the hotel and restaurants group, said last week that sales at its Marriott hotels had fallen during the six months to 1 September, and confirmed plans to sell its Bella Pasta, Café Rouge, Abbaye and Mamma Amalfi restaurant chains.

The 4.7% drop in like-for-like sales at Marriott came as its London hotels suffered a 24.6% sales slump. But this was offset by a 3.9% increase in the provinces.

Whitbread stressed that only 10% of its profits were generated in London. "The rest of the country continues to trade satisfactorily," it said.

The company has immediately put capital expenditure of £60m in its hotels division on ice, and said it would cut operating costs by £10m in the 2002-03 financial year. Projects on hold include a new Marriott hotel in Leicester, due to open in 2003, and the conversion of part of Whitbread's old brewery in Chiswell Street, in the City of London, into Marriott long-stay apartments.

Cost-cutting will include the loss of 120 hotel jobs in London, and grouping hotels into "clusters" of two to four properties to share human resources, property and financial support, leading to another 180 jobs being lost.

In restaurants, Whitbread said some smaller chains, including Bella Pasta, Café Rouge, Abbaye and Mamma Amalfi, lacked sufficient potential and would be sold.

Exact financial comparisons with last year are difficult because Whitbread has sold off its brewing interests, its pubs and its off-licences over the past two years, as well as buying the Swallow hotel chain.

Overall turnover was down by 35% to £1.14b and pre-tax profit before exceptional items was down by 25% to £135.7m.

But the company said like-for-like sales for the "future Whitbread" businesses were up by 4.2% during the six months. Operating profit was up by 10.1%.

by David Shrimpton