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Travelodge has reported an increase in revenues of 8% and has said it continues to “outperform the midscale market” in times of “economic uncertainty”.
In its half year results ending 27 June 2018 Travelodge has seen total revenue increase to £317m up from £294m the previous year. Travelodge also saw a 3.1% like-for-like RevPAR growth attributed to a “significant contribution” from new hotels opened since 2017.
It also said the revenue growth helped to “mitigate the impact of the significant cost increases, particularly the National Living Wage and higher operational costs”. As a result it reported EBITDA of £43m was up £1.3m on the prior year.
Over the period occupancy was reported to have increased by 2% to 75.9% with UK like-for-like average room rate maintained at £51.14 (2017: £51.07).
Travelodge said it now operates 564 hotels across the UK, Ireland and Spain and opened a further three during the period including its new 395 room flagship hotel London City. It also confirmed it was on target to open 20 new hotels in 2018 with the majority of these hotels expected to open in the fourth quarter of the year.
Peter Gowers, Travelodge CEO, said: “In the first half of the year, Travelodge delivered strong revenue growth and has continued to outperform the midscale and economy market segment. Our focus on location, price and quality is paying off with another period of increased occupancy.
“We now offer UK travellers more choice than ever, with a modernised core estate, our premium economy ‘SuperRooms’ and our new ‘Travelodge PLUS’ format. The recent opening of our new flagship hotel with 395 rooms in the heart of the City of London is a major milestone, highlighting just how far Travelodge has come since we opened our first small hotel by the roadside in 1985.”
He added: “While the UK continues to face economic uncertainty, demand for budget hotels remains strong and more and more businesses are choosing the budget sector. Although the general economic picture, the impact of new supply growth and clear short-term cost headwinds lead us to remain cautious about the immediate outlook, our strategic focus and growing pipeline will position us well as these pressures abate.”
