Travelodge revenue rises as events boost bookings despite cost pressures

In the UK, Budget hotel group Travelodge experienced a modest rise in bookings during key sporting events like Wimbledon and concerts by Kings of Leon and Justin Timberlake. Over the nine months leading to the end of September 2023, the company reported revenues of £786 million, showing a 0.5% increase from £782 million during the same period last year. However, this revenue growth was challenged by declining room rates, especially in London, which impacted overall sales negatively despite an increase in the number of occupied rooms. Travelodge managed to open five new hotels in the UK during this period, including two in London and an additional site in Bristol, along with five establishments in Spain. The increase in bookings was also credited to resilient demand from both leisure and business travelers. Events such as the European Society of Cardiology event and the Farnborough International Airshow contributed to this demand, although there was a noted slow down of bookings in October due to poor weather and a decrease in events. Looking forward, Travelodge is preparing to face the ongoing challenges posed by inflationary pressures, including rising energy costs and an expected increase in the national living wage. According to CEO Jo Boydell, the company anticipates a hike in business costs by approximately £21 million next year, attributable to upcoming changes in minimum wage and national insurance rates. To mitigate these impacts, Travelodge is taking measures to minimize costs and enhance operational efficiency, such as implementing robot vacuums in their hotels. Despite a challenging economic landscape and uncertainties within the sector, Travelodge remains optimistic about the long-term prospects and growth opportunities within the budget hotel industry. They assert that the demand for budget accommodations will continue as they navigate through the macroeconomic challenges in the current operating environment.