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Travelodge has seen its revenues dip by 3.2% to £471.3m for the six months to 30 June, as it experienced softer demand in Greater London and ongoing industry-wide cost pressures.
The news comes as the budget hotel group presses ahead with its largest development programme in more than a decade.
During the first half, group EBITDA fell to £47.3m, from £82.1m in 2024, with profits hit by around £20m in inflationary cost increases.
According to Travelodge, it saw a shift in major events into the second half of the year. Cost inflation, including around £9m from higher National Living Wage rates and National Insurance costs, also impacted profitability.
Despite these challenges, occupancy across the group’s portfolio remained strong at over 82%. Travelodge’s Spanish arm saw its revenues jump by about 30% and EBITDA up more than 30% to £4.8m.
The group continues to invest in its estate and digital customer offering. So far in 2025, Travelodge has opened 11 new UK hotels and expects to add at least nine more by the end of the year. In April, it acquired a portfolio of nine hotels – eight are already trading and undergoing refits, while the ninth is set to open later this year.
About 65% of the estate has now been upgraded with next-generation rooms and redesigned reception areas as part of an ongoing refurbishment programme. The group is also rolling out a new ‘Choose Your Room’ feature, a hybrid self-serve hotel model, and a generative AI assistant called Ara.
Jo Boydell, chief executive of Travelodge, said: “Travelodge delivered a solid first-half performance given the challenging market backdrop.
“Looking ahead, we are encouraged by the improving trading conditions we have seen in the third quarter so far, with total revenue to-date around 4% ahead of last year.”
Group cash stood at £152.5m at the end of the period, providing liquidity to support continued investment.
Travelodge said it remained confident in its strategy and well-positioned for “sustainable growth” over the medium term, although macroeconomic uncertainty continues.
