Travelodge Group
Good Q4 performance, revenue growth and solid liquidity; 2026 cost guidance reflects inflationary pressures and political environment
Trading update for the quarter and year ended 31 December 2025, and cost guidance for 2026
- Group revenue for the year up 0.7% to c. £1,044 million (2024: £1,036.6 million), with Q4 revenue up 4.3% to c. £261 million (Q4 2024: £250.5 million)
- Performance in line with the competitive segment in Q4 – good like-for-like Revenue Per Available Room (RevPAR) growth and contribution from new and maturing hotels
- Largest development programme in over a decade – 21 new hotels opened across the UK in 2025, spanning both leasehold and freehold models; further pipeline deals signed across the UK and Spain
- Solid liquidity position maintained – cash balances of £131 million at year-end
- Robust food & beverage performance, benefitting from rollout of 85 Bar Café concept and menu upgrades
- Spanish business delivered good revenue growth like-for-like and for new hotels
- Improved UK trading conditions in Q3 continued into Q4, with strong performance supported by major events, including the World Travel Market in London, England vs. Australia Autumn Rugby International, Premier League and European football fixtures, standout Christmas Markets and a busy New Year’s Eve
Jo Boydell, Chief Executive of Travelodge, said: “Travelodge delivered a solid performance in the fourth quarter, with Group revenue up 4.3% year-on-year, supported by strong demand from major events – including the World Travel Market in London, the England vs. Australia Autumn Rugby International, Premier League and European football fixtures, standout Christmas Markets, and a busy New Year’s Eve. We delivered our largest development programme in over a decade, opening 21 new UK hotels in 2025 as well as signing further pipeline deals in the UK and Spain and continuing to invest in growth and quality. Our food & beverage business also performed well, and our Spanish operations delivered good revenue growth.
“In the near term, it is clear that the cumulative impact of recent government policies has made the operating environment more challenging: higher business rates, rising employment costs and new regulatory requirements are direct headwinds to the health of the sector and future investment in a critical element of the UK economy.
“By focusing immediate business rates support solely on pubs, the Government is neglecting the broader hospitality sector and undermining its own goals for growth and job creation. Hotels like Travelodge are anchor employers and long-term investors in communities across the UK, supporting jobs and skills development. Higher rates and a lack of bespoke support, together with wider regulatory cost increases sends the message that the Government does not understand the economic value that our sector delivers. We urge the Government to listen and extend pub-style relief to hotels, re-balance the Retail, Hospitality and Leisure discount, and ensure transitional measures genuinely ease the impact of revaluation for larger hospitality businesses. The upcoming business rates review must address the needs of hotels to support long-term investment, skills and growth – both nationwide and for local communities.
“Despite these ongoing macroeconomic challenges, Travelodge is well placed for medium-term growth, underpinned by strong brand fundamentals and a diverse customer base. With favourable supply dynamics, we see real opportunity ahead. To fully unlock this potential, it’s essential that government policy supports long-term hotel investment, so we urge policymakers to consider the needs of our sector. The Group remains confident in the structural outlook for the budget hotel sector, supported by resilient fundamentals and an attractive supply backdrop.”
28 January 2026 – Travelodge Group, the UK’s first budget hotel brand which operates 625 hotels, today announces its trading update for the quarter and year ended 31 December 2025 and provides cost guidance for 2026.
Travelodge delivered a good performance in the fourth quarter, with revenue of approximately £261 million, up 4.3% year-on-year. For the full year ended 31 December 2025, Group revenue reached approximately £1,044 million, a 0.7% increase on 2024. Revenue Per Available Room (RevPAR) for the year was £57.00, reflecting a (1.9)% decrease versus 2024, broadly in line with the competitive segment, but impacted by the refit programme and regional mix. Group cash balances at year-end were £131 million.
The Group delivered its largest development programme in over a decade, opening 21 new hotels across the UK during 2025 and further strengthening its pipeline across both the UK and Spain. Both London and the regions delivered solid Q4 results in the UK, supported by strong leisure and business demand, ongoing investments in our customer proposition, including two-thirds of our room estate now upgraded, and effective revenue management. Food & beverage performance was good, benefitting from Travelodge’s 85 Bar Café roll out and investments in menu upgrades. Our Spanish operations delivered good growth across both the like for like estate and the prior year acquisitions.
Improved UK trading conditions reported in Q3 continued throughout quarter four, supported by major events including the World Travel Market at ExCeL London, the England vs. Australia Autumn Rugby International at Twickenham, Premier League and European football fixtures, standout Christmas Markets in Bath and Winchester, and a busy New Year’s Eve in central London and Edinburgh.
Cost guidance for 2026
Following the UK Budget in November, Travelodge is providing updated cost guidance for 2026. The Group expects gross cost inflation of 6%-7.5%, with net cost inflation of 5%-6.5% after efficiency measures, but before the impact of new hotels. The cost base remains largely fixed, with rent, payroll, energy and business rates the most significant expenses.
Rent costs for Travelodge OpCo Group (Thame and London Limited) are expected to be £295–£305 million in 2026. Wages are forecast to increase by approximately £9 million, reflecting the rise in the National Living Wage and changes to National Insurance thresholds. Energy costs are hedged, with no significant increase expected in 2026.
The upcoming business rates revaluation from April 2026 is projected to increase costs from £38 million in 2025 to £50 million in 2026, with further significant rises anticipated as transitional relief phases out over the next three years. The Group’s position remains that any business rates relief extended to pubs should also apply to the wider hospitality sector, including hotels. Additional regulatory costs, such as the Employment Rights Bill and potential new visitor levies, are expected to add to the cost base, though the impact is not yet quantifiable.
Travelodge will maintain a prudent approach to cash management, balancing liquidity with continued investment in the core estate and development. Capital expenditure for 2026 is expected to be around £100 million, with just under half allocated to discretionary refit investments, alongside new hotel development, technology and essential maintenance.
Outlook
In the near term, it is clear that the UK operating environment has become more challenging. The cumulative impact of recent policy changes – including higher business rates, rising employment costs and new regulatory requirements – is significantly increasing our cost base. While Travelodge has strategies in place to manage these pressures, their effects will be reflected in a more measured pace of growth in the UK market in the near term, as the policy landscape continues to evolve.
Although macroeconomic uncertainties persist, Travelodge’s strong brand, direct distribution model and balanced customer mix position the Group well for medium-term growth. Investments in both the UK and Spain are delivering results, and the Group remains confident in the structural outlook for the budget hotel sector, supported by resilient fundamentals and an attractive supply backdrop.
ENDS
Enquiries:
| FGS Global
Jenny Davey Anjali Unnikrishnan |
Tel: 0207 251 38 01 |
About Travelodge
Founded in 1985, Travelodge is Britain’s very first budget hotel chain and today is one of the largest budget hotel chains in the UK, with a portfolio of 625 hotels and approximately 49,000 bedrooms across the UK, Ireland and Spain.
In Spain, Travelodge has an established profitable presence and has ambitious growth plans within this market and has identified the top key locations where it would like to open additional hotels in Spain.
Welcoming over 22 million guests annually across the UK, Ireland and Spain, the majority of Travelodge hotels are located in major cities, towns and holiday hotspots as well as by airports and key business hubs. With over 96% of its hotels rated 4 dots or above on TripAdvisor, Travelodge is proud to offer guests across its diverse customer base a good value experience – whether they are travelling for business or leisure.
Whether out celebrating a birthday, going to a concert or sporting event, visiting friends and family, taking a business trip, working away from home, or taking a short break, we help people to go and do their thing by Being the Brilliant Base.
Travelodge continues to invest in its ongoing hotel refit programme and has already upgraded approximately two-thirds of the Travelodge room estate to its new design. The brand is also continually evolving its quality offering to deliver a better experience for its diverse mix of business and leisure guests such as its new look Bar Café design, 85 Bar Café, which has been rolled out to selected hotels in the UK and Spain as part of the refit programme.
Travelodge is focusing on its environmental and social impact, with sustainability integral to its business strategy. Its Better Future sustainability plan aims to build a more sustainable future for its customers, colleagues and the planet, underpinned by three core pillars: Inclusive – ensuring we are accessible, inclusive and well-priced to our customers and colleagues; Caring – creating a caring and healthy environment for our colleagues and customers and ensuring their wellbeing; and Conscious – Travelodge is conscious of its impact on the planet, taking into account the waste it produces, the energy and other resources it consumes and the carbon emissions it generates.
For further information visit travelodge.co.uk or the Travelodge Hotels Limited LinkedIn page.