Budget hotel chain Travelodge -which is active across Ireland, the UK and Spain – has said it is confident of future growth despite a challenging first quarter to this year.
The UK chain’s first quarter results show a revenue of £198.4m, which was down from £205.5m for the corresponding quarter last year; and a loss of £8.4m; a negative swing from a first quarter profit of £4.9m last year.
The lower revenue was impacted by softer UK market rates – particularly in the Greater London area. The loss was impacted by significant industry-wide inflationary cost pressures and weaker UK market (by far Travelodge’s largest market) conditions, partially offset by new hotels and strong cost control and efficiency measures.
That said, Travelodge said it is encouraged for the rest of the year, with second half booked revenue ahead of 2024.
Jo Boydell, Travelodge Chief Executive, said: “Travelodge has made good strategic progress in the first quarter, with our investments in growth and quality driving good occupancy levels ahead of the market. However, our performance in the traditionally most quiet quarter reflects challenging external market conditions, particularly in Greater London, where softer rates and reduced business travel impacted trading.
“We remain focused on driving growth, quality and efficiencies through strategic investments, including our hotel refit programme which has now seen c.60% of our room estate upgraded, continuing to deliver both commercial and customer benefits. We are also making excellent progress with our development plans, with 11 hotels open to date and a further four hotels exchanged or completed across a range of freehold and leasehold models. This is alongside a growing pipeline in Spain, where our expanded portfolio is performing strongly.
“Looking ahead, despite macroeconomic uncertainty, we are encouraged by H2 forward bookings, a robust summer events programme featuring major stadium concerts like Oasis, Beyoncé and Bruce Springsteen, and early positive signs of returning business travel demand, particularly from the construction sector. With a clear strategy supported by a strong liquidity position, efficient operating model and well-invested hotel network, we are well-positioned for the future and excited about the growth opportunities ahead of us.”
