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Press releases

UPDATE ON SUMMER TRADING

13th Sep 2011


13 WEEKS (1st June to 30th August 2011)
STRONG GROWTH WITH SALES UP 15%

• Total Sales Growth + 15%
London +19% and Provincial + 14%
• Like for Like RevPar +3%
London +7% and Provincial +1%
• Brand occupancy 83% +6 points
London occupancy 90% (+ 2 points) and Provincial 81% (+ 7 points)
• The impact of the London riots cost 2 percentage points of growth in the quarter

Efficiency
• Reduced prices by 5% (£42 average room rate)
• Despite continued high inflation, total costs per room (excluding rent) held flat with last year
• Proforma Return on Capital Employed continues to grow from last year’s return of 16%

Growth
• 22 new hotels opened to date –2415 rooms
• 16 hotels to open by Christmas – 1,660 rooms
• Created 180 jobs during the summer and recruiting 163 jobs before Christmas
• 15 hotels exchanged during June to August (1432 rooms)
• 10 million customers stayed with Travelodge in 2011 to date
• Cautious outlook for the remainder of 2011

Travelodge CEO, Guy Parsons commented: “This has been a good summer for Travelodge with total sales growth of 15%, brand occupancy of 83% and 15 new hotel exchanges. Despite continued high inflation, costs per room were held flat with last year and our return on capital continues to lead the sector.

“Due to hefty financial cutbacks the Staycation break has been bigger than ever this summer with 35% of Britons holidaying at home. In response to this growing trend, we took a strategic decision to focus on increasing occupancy rates by lowering prices, funded by our efficient low cost base and allocated 1.5 million rooms at £19 or less. This resulted in our coastal, tourist cities and holiday hot spot Travelodge’s achieving very high occupancy throughout the summer.

“Trading was, however, impacted by the recent riots, as 81 of our hotels were located in the affected cities. Over the two week period surrounding the riots, all of our hotels remained open, however, during this period we received more cancellations than bookings. Images of London burning and shops being looted flashing around the globe, stopped domestic and international travellers from leaving home and as a result our growth was lowered by two percentage points and cost the business a million pounds.

“We are under no illusion that Britons will continue to face tough challenges until the end of the year. Therefore we will continue to offer the consumer the best value to maintain occupancy. We have around 750,000 rooms available till the end of the year at £19 or less. We remain confident that with our strong pipeline of over eighteen thousand rooms; we are well placed to reach our targets.”

The 15 new hotel exchanges that took place during this summer represent an investment of £105 million and will create around 380 new jobs. The locations include eight properties across London at: Clapham, Wembley, Cricklewood, Harrow, Tooting, Woolwich, Bethnal Green and Sutton. The other locations are: Woking, Newquay, Ipswich, Sunderland, Burton, Crawley and Hemel Hempstead.

Ends

Notes to editors:
13 week quarter from 1st June to 30th August 2011
Proforma Return on Capital Employed with lease capitalised

In recent independent research by Customer Service Benchmark Ltd, which appraised Travelodge’s customer service against the Hospitality Sector, the budget hotel chain scored 89.8% against the hospitality average sector of 74.76%. The study involved independent mystery shoppers visiting each Travelodge hotel across the UK and benchmarking against a sample of sector visits. Travelodge not just scored favourably against the hospitality sector in general, it outperformed the Accommodation Sector which has an average benchmark of 76.26% and the three to five star hotels who have an average benchmark of 74.84%.

Free Wi-Fi:
Travelodge has recently announced it’s the first UK budget hotel chain to offer its customers free Wi-Fi in its Bar Cafés across the country.

Listed below are Travelodge’s top ten hotels with the longest period of high occupancy during June to August 2011:

1. Central London hotels (Covent Garden, Euston, Kings Cross)
2. Edinburgh
3. Carlisle and Lake District
4. Cornwall
5. York
6. Inverness
7. Bournemouth
8. Scarborough
9. Blackpool
10. Heathrow

About Travelodge: The first budget hotel brand to launch in the UK in 1985, Travelodge now operates 480 hotels and 33,758 rooms across the UK, Ireland (11) and Spain (3). Travelodge plans to grow its estate to 1,100 hotels and 100,000 rooms by 2025. Over 13 million people stayed with Travelodge last year and 90% of reservations are currently made online at www.travelodge.co.uk, where room rates start at £19 per night. The chain employs over 6,000 staff.


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