Travelodge preps for strong trading after encouraging Q1

Budget hotel chain Travelodge is feeling confident heading into the busy summer period after an encouraging first three months of 2024. The chain, buoyed by its acquisition of 66 hotels from LXi for £210m at the beginning of the year, reported revenue of £205.5m for the three months ended 31 March, up by 3.5% on the same period in 2023. Underlying EBITDA for the Travelodge operating company was £11.4m in Q1, down from £13m a year earlier. Across the group as a whole, which includes the property-owning division, underlying EBITDA was £12.9m. Travelodge said its Q1 results were consistent with the mid-scale economy segment, adding that although there were fewer events in the period, leisure bookings had been supported by the Cheltenham Festival, Six Nations Championship and various music concerts. Business travel demand benefited from face-to-face networking at industry events, said Travelodge,  including International Confex, Ice London and Oceanology International London. The hotelier added that while current trading had been impacted by the phasing of bank holidays, weather and fewer events, improving trading patterns had brought the last four weeks’ UK accommodation sales in line with 2023 levels. Chief executive Jo Boydell said: “Travelodge delivered a robust performance in what is typically a quieter quarter, supported by resilient demand from our diverse range of leisure and business customers who seek affordable, quality accommodation. “We are encouraged to see improving trading patterns over the last few weeks, with strong forward bookings supported by key events throughout the summer, including the British Grand Prix, Edinburgh Festival and the Open. Travelodge’s affordable proposition, together with our well-invested and diversified hotel network, positions us well to deliver long-term growth.” Travelodge has opened two new hotels in the year to date, in line with its expansion plans to open six UK hotels in 2024. This included the opening of its 600th hotel at London’s Oval cricket ground in February, offering 95 bedrooms, and the Northern Gateway Leisure Park in Colchester in April, offering 90 bedrooms. Looking ahead, the hotelier said that while the macroeconomic backdrop in the UK remained uncertain, it expected to benefit from several positive demand drivers, such as the continued staycation demand, changes in working patterns and events, supported by the improving UK consumer outlook. The group said it “remains confident in the long-term prospects for budget hotels and excited about the future growth opportunities”. Last month the group reported full-year revenue that saw it top £1bn for the first time.  Revenue at the budget hotel chain rose by 13.7% year-on-year to just over £1bn in the year ending 31 December, while adjusted EBITDA grew by 14.6% to £243.9m. Photo © Kit Oates Photography