Travelodge has released its half-year financial results, with the hotel chain seeing an 8 per cent increase in total revenue.
The growth was accompanied by a 3.1 per cent increase in revpar and a ‘significant contribution’ from new hotels opened since 2017, according to Travelodge. The chain says the availability of its new Superrooms and strong trading helped it outpace the rest of its segment by 2.7 percentage points.
The brand also debuted its new Travelodge Plus hotel format, opening its flagship property in the City of London in August. In the first half of 2018, the company opened six hotels, with a further three opening in the current quarter.
Travelodge says the growth has helped mitigate the impact of cost increases, including an increase in the National Living Wage and operational costs relating to higher occupancy rates – which rose 2.1 points to 75.6 per cent. As a result, the company’s earnings before tax were up £1.3 million year-on-year to £43.3 million.
Although demand for budget hotels has remained strong in the third quarter, Travelodge cites ‘significant’ regulatory and inflationary cost pressures as creating some economic uncertainty going forward. However, the company claims it will “remain well positioned” when the pressures lift.
Paul Gowers, CEO of Travelodge (pictured), commented: “While the UK continues to face economic uncertainty, demand for budget hotels remains strong and more and more businesses are choosing the budget sector. Although the general economic picture, the impact of new supply growth and clear short-term cost headwinds lead us to remain cautious about the immediate outlook, our strategic focus and growing pipeline will position us well as these pressures abate.”