Budget hotel chain Premier Inn contributed to a 4% rise in profits at parent company Whitbread's hotels and restaurants division.
Divisional profits for the year to March rose to almost £296 million after Premier's revenue per available room improved by 1.8% in the year, with an increase of 0.8% in the regions and 7.3% in London.
Premier Inn is involved in aggressive expansion plans to add 10,000 new rooms, after creating more than 4,000 rooms and 29 new hotels in the last year, bringing its total to more than 47,000.
Premier has benefited from customers looking for cheap deals and an advertising campaign featuring comedian Lenny Henry. But sales have slowed in recent months and Whitbread’s restaurant division has also come under pressure as food and fuel costs rise.
Chief executive Andy Harrison said the company's five-year milestones remain in place, with Premier Inn on track for 65,000 rooms by 2016.
Shares were 3% higher yesterday as Whitbread said Premier Inn and its restaurants started the new financial year with positive like-for-like sales growth while coffee chain Costa has continued its "good momentum".
Harrison added: "Trading in 2011/12 was variable month by month and we expect this to continue with short term comparatives affected by the phasing of bank holidays and the Olympics."
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