Budget hotel chain Travelodge has said it remains confident of significant future growth despite a tough first half of the year, which saw drops in both earnings and revenue.
The hotel chain – which operates across the UK, Ireland and Spain – generated revenues of £471.3m for the first six months of this year; down from almost £487m for the same period last year. Earnings fell, year-on-year, from £82.1m to £47.3m.
However, the group said it has seen improved trading conditions in the first few weeks of the third quarter of the year.
Jo Boydell, Chief Executive of Travelodge, said: “Travelodge delivered a solid first-half performance given the challenging market backdrop. During the period, we welcomed leisure guests attending major events such as the Six Nations Rugby, Radio One Weekend in Liverpool, the Grand National and the London Marathon, as well as business travellers for key conferences like Infosecurity Europe.
“As previously highlighted, demand was softer in the first half, particularly in Greater London, and event phasing has shifted more activity into the second half of the year. Profits were impacted by approximately £20 million of inflationary cost increases, including around £9 million from National Living Wage uplifts and additional National Insurance costs. Despite these headwinds, our diversified business and leisure customer base supported strong occupancy of over 82%, and the performance of our Spanish business was a particular highlight, delivering strong revenue and profit growth.
“We are undertaking our largest development programme in over a decade – having opened 11 new UK hotels so far this year, with at least nine more to come in the second half, and continuing with upgrades across our estate, with approximately 65% of our rooms now refitted to next generation standards. Alongside this, we continue to enhance our customer proposition through digital innovation and new features, including the rollout of the ‘Choose Your Room’ customer feature; our first hybrid ‘StaySmart’ hotel, which offers flexible self-serve check in options via mobile app, kiosk, or reception; and a new AI assistant, Ara – all supporting long-term growth and quality.
“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, and forward bookings to the year-end also ahead of 2024 levels, supported by strong event demand, although with the normal limited visibility. While the macroeconomic environment remains uncertain, we are confident in our strategy and are well-positioned to deliver sustainable growth over the medium-term.”
