Travelodge revenues hit £205.5m in Q1

Travelodge has reported a 3.5% increase in revenues to £205.5m for the quarter ended 31 March 2024. It said growth was supported by demand from a “diverse range” of leisure and business guests. RevPAR was up 1.0% to £46.45 compared with £45.98 in 2023, approximately 0.1pts ahead of the STR MSE benchmark competitive segment. However, the average room rate fell (0.9)% to £56.77. Quarter 1 2023 also benefited by c. £6m from favourable energy hedging at pre-energy crisis levels. This meant the comparable EBITDA was slightly down year on year from £13.0m to £11.4m, despite the considerable inflationary pressures which continue to be well controlled. For the Travelodge Group, which includes the benefit of Travelodge PropCo Group’s acquisition of 66 hotels from LXi REIT plc, underlying EBITDA was £12.9m. In current trading, the first weeks of Q2 have been impacted by the phasing of bank holidays, weather and fewer events but improving trading patterns have brought the last four weeks’ UK accommodation sales in line with 2023 levels. Forward bookings are also strong, particularly for key events such as the British Grand Prix, Edinburgh Festival and The Open, where bookings are exceeding expectations. Looking ahead, the group stated that whilst the current macroeconomic environment is putting pressure on household spending and consumer choices, customers are still choosing to travel and there is an encouraging improvement in the UK consumer outlook. It also expects each percentage point growth in RevPAR p.a. to impact Travelodge revenues by approximately £8-£9m. Overall, it anticipates full-year like-for-like hotel cost inflation in 2024 of approximately 5%, including the investments in quality, advertising and the favourable energy hedging in Q1 2023, and full year EBITDA margins in 2024 to reduce slightly, reflecting the continued inflationary cost pressures and investments in growth, efficiencies and quality. Jo Boydell, Travelodge chief executive, said: “Travelodge delivered a robust performance in what is typically a quieter quarter, supported by resilient demand from our diverse range of leisure and business customers who seek affordable, quality accommodation. “We deliberately accelerated our refit programme ahead of the peak season and continued to invest in our successful advertising campaign and business system upgrades. These investments will drive growth and quality and are already supporting positive customer and commercial benefits.” Boydell added: “We are encouraged to see improving trading patterns over the last few weeks, with strong forward bookings supported by key events throughout the summer, including The British Grand Prix, Edinburgh Festival and The Open. Travelodge’s affordable proposition, together with our well-invested and diversified hotel network, positions us well to deliver long-term growth.”