Travelodge sales boosted as more customers seek budget hotels
Travelodge expects to benefit from consumers reacting to the cost-of-living crisis by swapping more upmarket hotels for budget ones, the accommodation giant said as it revealed higher sales.
The company, which has nearly 600 sites that are mainly in the UK but also in Ireland and Spain, added in its results update that it plans to open around eight new hotels this year. The chain last month said there is potential to boost its network with 300 more UK Travelodges.
Expansion comes after total underlying revenue jumped to £909.9 million in 2022, up from £559.7 million a year earlier and £727.9 million pre-pandemic in 2019.
During the same period revenue per room was £52.59, compared with £33.04 and £42.46.
It was helped by opening six hotel openings in 2022 , but also the industry bouncing back from the pandemic with a host of events that boosted tourist demand for accommodation, such as the Commonwealth Games in Birmingham and the Jubilee.
Chief executive Jo Boydell said: “The market recovered, with strong demand for events and short staycation breaks throughout the year as well as for essential business travel and we continued to outperform the midscale and economy segment.”
The boss added: “Whilst the current macro-economic environment creates some uncertainty, the budget hotel segment has proven resilient as consumers continue to search for great value options within the marketplace.”
EBIDTA (adjusted) reached £212.9 million last year, up from £81.8 million in 2021.
Trading in the first quarter of 2023 has remained strong with accommodation revenue approximately 30% ahead of 2022 levels. Whilst business demand is improving, central London midweek days recovered slowest hit by rail strikes.
Travelodge, which is owned by Golden Tree Asset Management LP, said it completed a refinancing last month. It went through a CVA process with landlords in 2020 during the Covid-19 crisis.