Whitbread said the financial blow was due to the vast majority of its estate being forced to shut for much of the first six months of the financial year ending February 25.
Subsequent restrictions following more recent lockdowns also hit the business, with occupancy levels at just 23 per cent in January and 29 per cent in February.
But the firm is now looking to a surge in staycation bookings, with business travel and event-led stays coming back to the sector later in the year.
To try to capture more customers, the company plans to invest £350 million in refurbishments and improvements, and new advertising fronted by comedian and actor Sir Lenny Henry will be launched – the first such campaign for three years.
In the UK, currently more than 92 per cent of Premier’s hotels are open, following the easing of lockdown and travel restrictions.
Chief executive Alison Brittain told investors: “The last financial year was one of the most challenging in our 279-year history, as we operated under significant Covid restrictions which had many implications for our businesses, our customers and our people.
“Our business model enabled us to respond rapidly to the changing restrictions and to quickly adapt our operations as required, prioritising the health and safety of our colleagues and our customers.
“Our exposure to the faster recovering budget sector, our resilient customer mix, and the enhanced structural opportunities that the Covid crisis has created, positions us well to continue this outperformance.
“The vaccination programme in the UK means we can look forward to the planned relaxation of government restrictions as we move into summer, with the first major milestone being the return of leisure guests to our hotels, and the full reopening of restaurants from May 17. We expect a significant bounce in leisure demand in our tourist locations during the summer, followed by a gradual recovery in business and event-driven leisure demand.”
As a result of the pandemic, revenues fell 71.5 per cent to £589.4m from £2.1bn a year earlier and a pre-tax profit of £280m flipped to a £1.01bn pre-tax loss.
Whitbread survived the pandemic by tapping into £270m in claims from the UK and German governments for furlough cash and support, and also raised £1bn from shareholders, alongside £550m in a Green Bond.
Bosses said they also expect to make future cost savings of £100m by 2024.
Greg Johnson, an analyst at brokerage Shore Capital, said: “Whitbread has issued preliminary results for the year-ended February 2021. The key message being that the performance was in line with expectations, the balance sheet remains strong and that it is set to push on the accelerator for its expansion plans in Germany and market share gains in the UK, with over £350m of capital expected to be invested in the current year.
“At this stage, we anticipate Whitbread reaching cash flow breakeven levels by the end of H1 and moving into profitability during the second half.”