Travelodge Group

Return to revenue and profit growth for Q3 in line with expectations; Improved trading conditions and continued good strategic progress

Trading update for the nine months ended 30 September 2025

  • Year-to-date Group revenue of £783.2 million (YTD 2024: £786.1 million) – broadly flat year-on-year, reflecting weaker H1 UK market conditions, partially offset by improved trading conditions in Q3, the contribution from new hotel openings and continued growth in Spain
  • Year-to-date Group EBITDA (adjusted) of £140.2 million (YTD 2024: £171.7 million) – impacted by challenging H1 trading and significant cost headwinds, partially offset by profit growth in Q3, in line with expectations
  • Executed largest development programme in more than a decade – 21 new UK hotels opened in the year to date, across leasehold and freehold models; in Spain, deals completed for two new freehold hotels in Bilbao and Madrid set to open in 2026 and 2027
  • Spanish business continues to perform strongly – YTD revenue up 17% and EBITDA up to £2.8 million (YTD 2024: £2.3 million), driven by like-for-like growth and contribution from new hotels
  • Good UK food & beverage performance continued, delivering revenue and margin growth, supported by upgraded customer proposition and menu upgrades
  • Continued strong cost control and focus on efficiencies – helping to mitigate inflationary pressures and support profit growth in Q3
  • Ongoing investment in customer proposition – two-thirds of the estate now upgraded; rollout of new digital features including ‘Choose Your Room’ and AI assistant; expansion of Travelodge’s self-serve ‘StaySmart’ hotel trial
  • Strong liquidity position – period-end Group cash of £177.9 million, supporting continued investment in growth and development
  • Q4 trading to date encouraging – total revenue c.4% ahead of 2024 levels, with positive forward booking patterns, but usual limited visibility; remain cautious given macroeconomic and political uncertainty

Jo Boydell, Chief Executive of Travelodge, said: “Travelodge delivered a solid third quarter, with revenue and profit growth in line with expectations, supported by an improving UK market backdrop. We saw good leisure demand around major events – such as the Oasis reunion, Coldplay at Wembley, the Women’s Rugby World Cup Final at Twickenham, the British Grand Prix and Goodwood Festival of Speed. On the business travel side, key conferences and exhibitions like Defence and Security Equipment International (DSEI) in London also boosted performance. New and maturing hotels across London and the regions, as well as in Spain, contributed positively, and good food & beverage performance continued to deliver revenue and margin growth.

“As previously reported, the first half was more challenging, with softer UK market conditions and persistent inflationary pressures weighing on year-to-date results, only partially offset by the positive Q3 performance. Group profit for the nine months was impacted by c.£30 million of cost inflation, including National Living Wage (NLW) and National Insurance increases. Into 2026, we expect further cost pressures from the 2026 increase in NLW, the Employment Rights Bill, the business rates revaluation due in April 2026 and the introduction of new visitor levies, though the impact remains difficult to quantify at this stage. We remain focused on strong cost control and technology driven efficiencies to help mitigate these pressures as far as possible.

“We have made excellent progress on our largest development programme in over a decade. In the UK, we have opened 21 new hotels so far this year – across freehold and leasehold models, including 12 freehold rebrand acquisitions, four new traditional leaseholds and five leasehold rebrands – spanning London, regional cities and key leisure hubs. In Spain, our business continues to perform strongly, with good growth across the portfolio, with deals completed for two new freehold hotels due to open in Bilbao and Madrid in 2026 and 2027.

“We continue to invest in our customer proposition. Our refit programme is well progressed, with two-thirds of rooms now featuring our upgraded modern, comfortable design. We have also introduced new digital features, including ‘Choose Your Room’, our first hybrid ‘StaySmart’ hotel with flexible self-serve check-in, and our AI assistant, Ara.

“Looking ahead, we are encouraged by positive trading momentum in the fourth quarter, with total revenue to date c.4% ahead of 2024 and forward bookings also ahead of last year, however, we note the usual limited visibility. Amid ongoing macroeconomic and political uncertainty – including cost pressures from the UK Budget – we remain cautious about consumer demand and cost inflation. However, Travelodge is well positioned for medium-term growth and is confident in the structural outlook for budget hotels, underpinned by proven resilience, strong fundamentals and an attractive supply backdrop.”

27 November 2025 – Travelodge Group, the UK’s first budget hotel brand which operates 625 hotels, today announces its trading update for the nine months ended 30 September 2025.

Travelodge delivered a solid third-quarter performance, growing revenue and profits for the quarter in line with expectations amid an improving trading environment. Group revenue for the nine months was £783.2 million (2024: £786.1 million), reflecting challenging market conditions in the first half, offset by improved Q3 trading, contributions from new and maturing hotels, continued growth in food & beverage and strong performance in Spain.

The Group continued to face significant industry-wide cost inflation, with profits impacted by c.£30 million of cost increases year-to-date, including the annualisation of National Living Wage rises (c.10% in 2024, 7% in 2025) and higher National Insurance contributions from April 2025. Rent costs also increased due to the impact of the roll through of a proportion of uncapped 5-yearly upwards only rent reviews. Travelodge’s continued focus on strong cost control and its efficient operating model continue to help mitigate these pressures.

Despite these headwinds, Travelodge benefited from resilient demand across a diverse mix of business and leisure guests, maintaining strong occupancy. Major leisure events included the Oasis reunion, Coldplay’s ‘Music of the Spheres’ at Wembley, Wimbledon, the British Grand Prix, and Goodwood Festival of Speed. On the business travel side, conferences and exhibitions such as DSEI (Defence and Security Equipment International) in London also supported demand.

In Spain, the business continues to perform strongly, with good growth across the portfolio and two new freehold hotels set to open in Bilbao and Madrid in 2026 and 2027, as previously announced. For the nine months, Spanish revenue increased by 17% and EBITDA rose to £2.8 million (YTD 2024: £2.3 million), driven by like-for-like growth and new hotel openings.

So far in the fourth quarter, Travelodge has seen improved UK market trading conditions continue, with total revenue to date around 4% ahead of 2024. This reflects strong performance across both London and the regions, supported by good leisure performance, solid corporate demand, and the contribution from new hotels. London has seen strong occupancy growth despite tough comparatives, while the regions continue to benefit from rate growth. Forward booking patterns remain positive, with booked revenue to the end of 2025 ahead of the prior year, with the usual limited visibility.

Excellent progress on largest development programme in over a decade 

Travelodge has made excellent progress on its largest development programme in more than a decade. 

In the UK, 21 new hotels have opened so far in 2025 across a mix of freehold and leasehold models, including 12 freehold rebrand acquisitions, four new traditional leaseholds, and five leasehold rebrands, spanning London, regional cities and key leisure hubs. The pipeline has been further strengthened by the previously announced office acquisitions in Central London for future conversion, subject to planning. 

However, real estate market challenges persist and continue to impact the pace of Travelodge’s traditional UK leasehold development model. As a result, new openings under this model are expected to remain suppressed in the short term, with six new leaseholds targeted for 2026.

In Spain, momentum remains strong, with two previously announced freehold developments secured in Bilbao (opening 2026) and Madrid (opening 2027), alongside a growing pipeline of new-build and conversion projects. The Spanish market continues to present attractive opportunities, supported by robust business and leisure demand and low penetration of branded budget hotels.

Continued investment in quality, customer proposition and efficiencies

Travelodge continues to make good progress on its strategic priorities, investing in growth, quality, efficiencies and the customer proposition.

The refit programme is well advanced, with approximately two-thirds of the estate now upgraded with Travelodge’s modern, comfortable room design, redesigned reception areas and the new 85 Bar Café concept. Over 96% of Travelodge hotels are now rated four dots or above on Tripadvisor.

The Group’s food & beverage business delivered further revenue and margin growth in the quarter, reflecting the benefits of recent menu enhancements and Bar Café upgrades as part of the wider refit programme. 

New digital features such as ‘Choose Your Room’ – now rolled out across the estate – give customers the option to select their exact room, with strong early take-up. The Group has also launched its first hybrid ‘StaySmart’ hotel trial at London City, offering flexible self-serve check-in via mobile app, kiosk or reception, building on positive feedback from the initial self-serve trial hotel in St Albans.

Another recent enhancement includes the launch of a new mobile app featuring Apple Pay, Google Pay, biometric login and personalised experiences, which has achieved a 4.8* customer review rating.

Travelodge’s AI assistant, Ara, is now available to our UK hotel customers, providing quick, helpful answers on topics such as parking, breakfast options and nearby attractions.

Board Change

Travelodge today announces that Stephen Shurrock has been appointed Chair of Travelodge, succeeding Martin Robinson, who will be stepping down from the Board and his role as Chair after four and a half years with the company. 

Outlook 

Travelodge expects further cost pressures in 2026. As the National Living Wage increased by 6.7% from April 2025 and will increase by 4.1% from April 2026, Travelodge’s wages costs will increase by c. £9 million in 2026, including the annualisation of the 2025 increase. In addition, the increase in employer National Insurance contributions from April 2025, alongside the reduction in the threshold that employers start to pay National Insurance, will increase costs by c.£2 million in 2026. 

The upcoming business rates revaluation, that is due from April 2026, is likely to significantly increase this cost, however, Travelodge does not yet have clarity on the quantum. Travelodge also anticipates the Employment Rights Bill will further increase costs as it comes into effect, although the impact is also not yet quantifiable. 

Travelodge has also seen the introduction of new visitor levies in England through Accommodation Business Improvements Districts (ABIDs), a specific levy where a charge is applied to overnight stays in hotels and other similar accommodation. At the same time, Scotland and Wales are developing their own visitor levy regimes. The potential impact of the visitor levies is unclear as there is little consistency currently, with no centralised framework in existence, meaning that decision to charge a visitor levy and the associated rate is set locally with a lack of transparency. The Government’s plan to empower English mayors to implement a nightly tourism tax on accommodation providers will also further increase costs, although there is not yet clarity on how this will be implemented and the interplay with existing and potential future ABIDs. 

Amid increased macroeconomic and political uncertainty, Travelodge remains cautious about the potential impact on consumer demand and cost inflation. In the medium-term, Travelodge’s strong brand, direct distribution model and balanced customer mix position the business well for future growth. Travelodge’s investments in the customer proposition and development strategy are delivering results in both the UK and Spain. The business remains confident in the structural outlook for budget hotels, underpinned by proven resilience, strong fundamentals and an attractive supply backdrop.

ENDS

Enquiries:

FGS Global

Jenny Davey

Anna Tabor: 

  

Tel: 0207 251 38 01

Travelodge-LON@fgsglobal.com
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 UK hotels 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.