Whitbread will now turn its focus to its budget hotels

The 46 hotels - part of a joint venture set up with Marriott International last year - have been sold to Royal Bank for Scotland for £951.4m ($1.7bn).

Whitbread will receive £237m for its share of the sale.

The deal will allow Whitbread to pay an extra £400m to investors, on top of a £400m special dividend agreed in 2005.

Whitbread had long been expected to quit the four-star hotels business to concentrate on its more lucrative budget hotels.

In the 50 weeks to February, like-for-like sales at the group's Premier Travel Inn business increased by almost 7%.

That was in sharp contrast to struggling sales at the firm's restaurants and pubs divisions - which include TGI Fridays and Pizza Hut - which have both been struggling in a tough market.

Shake-up

The disposal of the Marriott hotels is part of Whitbread's efforts to restructure the group.

Last year, the group said it was setting up a joint venture with Marriott International - the US owner of the brand - which would hold onto the 46 UK hotels until they were sold.

It received an initial payment of £710m under the agreement - £400m of which was earmarked to be returned to shareholders while £100m went towards cutting its pensions deficit, and the rest was used to cut its debts.