Travelodge delivers ‘record’ results in Q3

Travelodge has delivered “record” financial results in its third quarter, as total revenues hit  £669.9m, up by 22.7% or £123.8m against 2019, and up by £295.2m against 2021.  

In the period ended 30 September, UK like-for-like RevPAR was up 20.8% to £51.80 compared to 2019 (2019: £42.86), while like-for-like occupancy was up 0.7pts to 81.5%, and like-for-like average room rate was up 19.8% to £63.59.  

EBITDA also hit a “record” profit of £164.4m compared to a profit of £102.2m for 2019 and a profit of £43.7m for 2021.  

Travelodge said it continued to outperform, with UK like-for-like RevPAR performance 10.8pts ahead of the competitive segment against 2019, with outperformance in both London and the Regions.  

According to the group, its strong quarterly performance was driven by strong leisure and blue-collar business demand, which “more than offset” the more gradual recovery in white-collar demand.

It also attributed its results to outperformance against the MS&E segment, now in its eighth consecutive year, as well as new hotel openings in the period. While the group acknowledged it faces pressure from inflation, it said costs remained “well controlled”. 

Looking ahead, trading in the first weeks of quarter four has reportedly continued to benefit from strong leisure and ‘blue-collar’ business demand with “encouraging” improvements in ‘white-collar’ demand. 

It said that whilst the current political and macro-economic environment “creates an uncertain backdrop,” the budget hotel segment has “proven resilience and we expect to benefit from attractive demand drivers”. 

Travelodge CEO Jo Boydell said: “We have continued to outperform against the competitive segment, for the eighth consecutive year, and it’s particularly pleasing to see these trends continue in the first weeks of the fourth quarter.  

“Our cash position remains strong, and we have continued to invest in the business whilst also further de-leveraging, with the term loan repaid in full on 26 October.  We were also pleased that on 17 November Moody’s upgraded our credit rating from Caa1 to B3, reflecting the businesses strong performance.”  

She added: “Looking ahead, we are very mindful of the cost-of-living crisis and are doing all we can to navigate the cost pressures on our business. The near-term trading signs are positive, but booking patterns remain short-lead and we therefore have limited visibility.  

“However, the budget end of the hotel segment is the most resilient, with budget brands historically performing strongest in tough economic times. Travelodge, with its strong brand, diversified network of hotels, value proposition and efficient operating model, remains well placed to deliver for customers and we are excited about the growth opportunities ahead.”