Travelodge cheers record quarter and upbeat over outlook despite cost crisis
The budget hotel chain said underlying earnings hit a record £93.8 million in the three months to September.
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Your support makes all the difference.Budget hotel chain Travelodge has revealed a record third quarter thanks to a surge in bookings after it saw soaring demand from mourners following the Queen’s death.
The group – which has 595 hotels across the UK, Ireland and Spain – said that by the end of the three months to September, it had already beaten the full-year result notched up in 2019 before the pandemic struck.
It said underlying earnings hit a record £93.8 million for the quarter, up from £87 million a year ago, after revenues jumped to £278.6 million – up 21.5% on a year earlier and 33.5% higher than the same period in 2019
This helped the hotel chain notch up a 22.7% rise in underlying revenues versus 2019 to £669.9 million for the first nine months of the year so far.
Underlying earnings for the nine months stood at £164.4 million, up from £102.2 million on the same period in 2019 and nearly four times the £43.7 million recorded a year earlier.
It came as more Britons booked for leisure stays and so-called blue collar workers such as those in the construction and manufacturing sectors looked for budget accommodation.
Travelodge also saw its hotels in high demand in the weeks leading up to the Queen’s funeral, with many of its hotels in and around London and Edinburgh fully booked.
It said in mid-September that its hotels were completely sold out in central London, as well as those close to train stations, as mourners rushed to pay their respects to the late monarch.
The group also said that trading in the first weeks of quarter four had remained strong and “continued to benefit from strong leisure and ‘blue-collar’ business demand with encouraging improvements in ‘white-collar’ demand”.
It has also recently seen a boost from events bookings and the half term school holiday.
However, the budget end of the hotel segment is the most resilient, with budget brands historically performing strongest in tough economic times
The group said it was “very mindful” of the cost-of-living crisis and cost pressures on the business, with soaring prices for areas such as laundry, food and drink.
But it is hoping to weather the wider economic storm, given that more Britons may trade down to budget hotel brands in light of the inflation woes and the possibility that more staycations may be back on the cards.
Jo Boydell, chief executive of Travelodge, said: “We are very mindful of the cost-of-living crisis and are doing all we can to navigate the cost pressures on our business.
“The near-term trading signs are positive, but booking patterns remain short-lead and we therefore have limited visibility.
“However, the budget end of the hotel segment is the most resilient, with budget brands historically performing strongest in tough economic times.”
The chain has recently been rolling out a new “budget luxe” design and aims to have upgraded 65 hotels by the end of the year, with features including a new “timeless classic style” reception with leather bench seating and wooden style flooring, as well as a more contemporary restaurant and bar called The Bar Cafe.