Financial headlines (Period 1st January 2023 – 30th June 2023)
Strong strategy execution delivers record results: revenue up 22.4% to £478.7 million; EBITDA (adjusted) up 48% to £104.5 million; RevPAR up 20.7% to £54.92
Performance driven by robust customer demand: strong concerts and events bookings including Six Nations Rugby Championship and Grand National; short breaks driving leisure bookings; record number of business account sign-ups and a return of face-to-face business networking at conferences including the International Food and Drink Event and IFSEC, a UK security conference, at ExCel London
Good momentum into H2 and well-positioned for growth: full year profits for 2023 expected to be ahead of 2022 levels
Continued strong cash flow generation: period end cash of£192.9 million; successful refinancing which extended debt maturities to 2028
Continued investment in quality: ~25% of room estate on track to be upgraded to new design by end of 2023, with plans to accelerate the refit rollout following positive customer feedback and improved performance
Jo Boydell, Travelodge Chief Executive, 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. Leisure guests used Travelodge as a base to enjoy friends and family get-togethers, and sports and music events including the Six Nations rugby, the Grand National, and Eurovision. This is alongside business guests returning to trade fairs, and looking for affordable, and quality accommodation for their day-to-day business needs.
“We are continuing to invest in our UK hotel portfolio, with a quarter of our room estate on track to be upgraded to our new design by the end of this year as part of our most significant transformation to date. The new design includes features our customers have told us are important like bedside USB charging ports, blackout curtains, a new comfy armchair and a number of sustainable initiatives such as carpet made from recycled fishing nets and old plastic bottles, and low energy lighting.
“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. “I want to thank all our 12,000 colleagues for their ongoing hard work and commitment. These results are a testament to the work they do every day to look after our customers.”
Jo Boydell, Travelodge CEO
24th August 2023 – Travelodge, the UK’s largest independent hotel chain which operates nearly 600 hotels, today announces record-breaking results for the six months to 30 June 2023, reporting a revenue and profit performance significantly ahead of 2022 levels. The business delivered a 22.4% increase in revenue to £478.7 million and 48% increase in underlying earnings (adjusted EBITDA) to £104.5 million, reflecting the continued resilience of the UK budget hotel segment and the wide appeal of Travelodge’s quality and value offering across its 598 hotels and over 46,000 rooms.
This strong half year performance, which included a number of record-breaking trading days and weeks, was driven by demand across Travelodge’s diverse customer base of leisure and business travellers. Travelodge is a great base for leisure customers to stay and enjoy friends and family get togethers, short breaks and sporting events such as the Six Nations Rugby Championship and the Grand National as well as music festivals and concerts.
Travelodge also benefits from a diverse mix of business guests – from business executives to tradespeople – with record levels of sign-ups for Travelodge Business Accounts in 2023, as businesses seek good quality, affordable accommodation. The company has also seen increased demand from a return to face-to-face business travel, with a growth in corporate exhibitions including the International Food and Drink Event and IFSEC, the security conference, at ExCel London.
Positive trading patterns have continued in the first weeks of the third quarter, with accommodation revenue approximately 8% ahead of 2022 levels.
Brand investment and upgrade
Travelodge is investing to drive long-term growth, enhancing its proposition of location, price and quality to suit all travel occasions, and already, over 85% of Travelodge’s hotels are rated 4* or above on TripAdvisor. In January, Travelodge released over two million rooms for £38 or less across its UK portfolio for 2023.
Travelodge’s ongoing hotel refit programme is expected to see 25% of the room estate upgraded to the new design by the end of 2023. The business has accelerated this programme following a positive customer response and boost to hotel performance from the upgrades to date.
The latest upgrades represent the group’s most significant transformation to date, offering a premium look and feel hotel design, whilst incorporating all the low-cost efficiencies synonymous with Travelodge. This includes a new style reception area, a next generation room with features such as bedside charging ports, blackout curtains, a comfy armchair, and upgraded bar cafes. The new hotel design also incorporates a number of sustainable initiatives such as carpet made from recycled fishing nets and old plastic bottles, low energy lighting, and aerated showers and taps.
New Bar 85 at London Kings Cross Royal Scot
As part of the upgrade programme, Travelodge is trialling a new look Bar Cafe design called ‘Bar 85’ in some of its hotels. Launched at London Royal Scot Kings Cross Travelodge, this new contemporary casual concept provides all-day dining; a dinner menu with meal deals from £12.75; and a statement bar offering a wide drinks selection including wines, spirits, cocktails and soft drinks. This is alongside the £8.99 Travelodge Unlimited Breakfast menu which allows two children to eat for free with every paying adult.
To deliver Travelodge’s attractive customer proposition on a consistent basis and support quality the business also continues to invest in its data capabilities and digital platform, including enhanced search capabilities and personalisation to further optimise digital conversion, alongside leveraging technology-enabled room checking and the implementation of robot vacuums – an industry first.
Travelodge will be launching a new multi-million brand campaign in 2023.
Travelodge opened four hotels in the period, including three in the UK and one in Spain, a number which reflects delays to new hotel deals during pandemic impacted years and current adverse market conditions, with a further three openings planned for the second half of the year.
London Peckham Travelodge, opened May 2023
However, long-term growth potential remains significant, and Travelodge has identified the opportunity for a further 300 hotels in the UK, with openings expected to return to more normal levels as the current adverse market conditions improve, through a mix of new build, conversions, going concerns, standalone and mixed-use schemes.
Alongside strong potential in the UK market, Travelodge is 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.