Travelodge said it plans to open a further 300 hotels in the UK, as it posted a record performance for the first half of 2023 and forecast full year profits ahead of 2022.
During the first half of 2020, the budget hotel brand opened three hotels in the UK and one in Spain. It noted that while adverse market conditions have impacted deals, it expects openings to return to more normal levels as conditions improve, through a mix of new build, conversions, going concerns, standalone and mixed-use schemes. It stated it plans to open three more hotels in the second half of 2023.
Travelodge added its also exploring expansion opportunities in Spain, following the opening of its first new hotel in the country in ten years, in Madrid. The company now operates 6 hotels in Spain with 700 rooms.
Turning to its financial performance in the first half of the year, Travelodge posted revenue of £478.7 million, up 22.4 percent compared to H1 2022 and adjusted Ebitda of £104.5 million, up 48 per cent year-on-year.
The company said its performance was driven by leisure and business demand, noting it has also seen increased demand from a return to face-to-face business travel as business guests return to trade fairs.
Travelodge added positive trading patterns have continued in the first weeks of the third quarter, with accommodation revenue approximately 8 per cent ahead of 2022 levels.
Travelodge also noted progress in its hotel refit program which will see 25 per cent of its rooms upgraded by the end of 2023.
Why it matters
Travelodge’s record earnings indicates a clear boost in consumer demand for budget hotels as the cost-of-living continues to squeeze discretionary spending. And it seems Travelodge is positioning itself to benefit from this need not just in the UK, but internationally. Its refit program also signals an intention to appeal to customers who may want the feel of a higher-end product at a budget price.
What they said
Jo Boydell, Travelodge CEO said: “I am delighted to announce a record first half performance which reflects strong customer demand from our diverse mix of leisure and business guests. As we look ahead, we see significant opportunities for further growth and have identified more than 300 sites for new Travelodge hotels across the UK, as well as opportunities to grow our operation in Spain.”