Travelodge Group: Solid H1 performance with continued strategic progress and ongoing investment against challenging market backdrop

Travelodge Group financial results for the six months ended 30 June 2026

H1 revenue £491.3 million (2025: £471.3 million), solid first half trading against softer market demand backdrop, driven by new & maturing hotels, food & beverage and Spain

Good leisure demand across London and the Regions, with weaker corporate demand, particularly in London in line with the rest of the market

Travelodge performed slightly ahead of the competitive segment

Spanish business continues to perform well, with good revenue growth of c. 22% and strong margins

Costs in line with expectations, impacted by significant inflationary pressures, partially mitigated through cost efficiencies and disciplined cost control

Group adjusted EBITDA £47.9 million (2025: £47.3 million), a robust performance when faced with significant cost pressures

Solid liquidity position with period end cash of £104.4 million; continuing to invest in the core estate

Well invested estate with over 75% of the estate now upgraded to our new look, alongside ongoing investment in guest and staff safety

F&B performance benefitting from our ‘85’ Bar Café upgrades as part of the refit programme, back-office system and menu upgrades

Steady development progress with three hotels opened so far this year across UK and Spain. Diversified pipeline of development opportunities in both the UK and Spain, though real estate market challenges remain

Q3 to date total revenue up c. 3%, including the benefit from new & maturing hotels

Mindful of the continued macroeconomic and political uncertainties impacting consumer and business demand

Confident in the medium-term prospects for budget hotels, with proven resilience through economic cycles, a diversified customer base and strong fundamentals

Board changes

We are today announcing that Jo Boydell has stepped down as CEO of Travelodge. Ray Reidy, Travelodge CFO, will assume the role of interim CEO while we conduct a thorough search for a permanent successor.

We’d like to thank Jo for her dedication to Travelodge over the last 13 years.

Ray Reidy, Travelodge Interim Chief Executive, said: “I’m pleased to report a solid trading performance delivered against a continually challenging market backdrop. To maintain profitability when we have had to contend with significant inflationary and regulatory cost pressures is a creditable performance and is a testament to the hard work of our teams and the strategic progress we have made.

We saw good leisure demand in the period, particularly in London where we benefitted from a strong events programme including Harry Styles at Wembley Stadium and the London Marathon leading to a record revenue night for London. Our Spanish business continues to perform well and we see excellent opportunities for further growth.

We remain focused on the safety and well-being of our guests and will continue taking the actions necessary to strengthen the business. We will also continue to engage proactively and constructively with Government and the wider hospitality industry on the issue of safety and security.

The medium-term prospects for our market remain positive and our well-invested estate positions us well to benefit from the strong market fundamentals.”

20 August 2026 – Travelodge Group, the UK’s first budget hotel brand which operates 632 hotels across the UK, Spain and Ireland, today announces its financial results for the six months ended 30 June 2026. The business delivered revenue growth of 4.2% to £491.3 million (2025: £471.3 million), a solid trading performance, driven by new & maturing hotels and Spain, helping to offset the significant inflationary and regulatory cost increases we faced alongside the rest of the industry, and maintain profitability.

Travelodge continues to attract a wide range of business and leisure customers; we performed slightly ahead of our competitive segment with occupancy significantly ahead of the segment.

In H1, the STR MSE competitive segment performed in line with last year, with London performance weaker than the regions, driven by rate decline. The regions performed better and were slightly ahead of last year. Travelodge UK like-for-like RevPAR grew 0.1% compared to 2025, slightly ahead of the competitive Smith Travel Research (STR) MSE benchmark competitive segment. This performance reflected the investments in the customer proposition, revenue management and distribution capabilities, offsetting some temporary impacts from rooms offline for repairs in a small number of hotels.

Leisure demand has been the strongest, particularly in London where there has been a large number of concerts, including Harry Styles at Wembley and a record weekend in London during the marathon. There was robust leisure demand in the regions with new events, such as Take That’s UK tour, broadly offsetting missing events this year. Corporate demand has been weaker, particularly in London, and the hot weather in Q2 impacted market performance, particularly midweek.

We delivered good growth in food & beverage revenue, with a c. 8% UK increase compared to 2025, benefitting from our ‘85’ Bar Café roll-out, back-office system and menu upgrades along with the contribution from new & maturing hotels.

Our Spanish business continues to perform strongly and grew revenues by c. 22% (£3.7m), including the impact of new and maturing hotels.

Total revenue in H1 grew by 4.2% on 2025, reflecting the slightly positive UK LfL RevPAR, contribution from new & maturing hotels and growth in F&B and Spain.

Our industry leading operating cost model and strong supplier relationships, together with investment to deliver cost efficiencies, helped to control costs. However, this only partially mitigated the impact of industry wide inflationary pressures, including the annualisation of the increases in the National Living Wage and employer NICs, further National Living Wage and business rates increases from April 2026, as well as the multi-year inflationary impact on our rent costs where a proportion of rent reviews are uncapped, due to the 5 yearly review cycle. We continued to invest in the business to drive growth, quality and efficiencies.

The profitability of our Spanish business continues to increase, with EBITDA increasing by £2.1m to £6.9m and strong profit margins of c. 34%.

Total EBITDA increased year-on-year from £47.3m to £47.9m, with the solid trading performance weighted against reflecting inflationary and regulated costs increases which we have worked hard to mitigate where possible.

Liquidity and Financing Update: solid liquidity position maintained

We ended the period in a solid liquidity position, with cash of £84.3m. Free cash inflow for the period was £15.5m before development capital expenditure, financing activities and non-underlying items. This was predominantly driven by the EBITDA (adjusted) profit, a working capital inflow in line with seasonal trading patterns and capital investment including our refit programme.

Cash as of 12 August 2026 was £107m and we will continue to balance investments in the business with overall liquidity and cash flow.

We continuously review our capital structure in light of our business objectives and liquidity requirements, with many options available. We are aware of the interest in our plans regarding upcoming maturities and we remain confident that sufficient optionality exists to address that debt when required.

Strategic progress continues

Our network is well invested, and we will continue to make investments to strengthen the quality of our offer. The upgrades we are making to the customer proposition continue to drive positive results. Our refit programme is well progressed, with over 75% of the room estate now refitted, with next generation rooms and a re-designed reception, as well as upgraded bar cafés in 117 hotels in our new ‘85’ Bar Cafe design, delivering a warmer and more welcoming environment.

The programme is delivering both commercial and customer benefits, with over 96% of the hotels now rated four dots or above on Tripadvisor and 329 hotels receiving a Tripadvisor Traveller’s Choice Award in 2026.

We have also redesigned our SuperRoom proposition with additional features that are being rolled out as part of the future refit programme. We are trialling a new Studio room type, offering more flexible space for families or customers on leisure stays with friends who are looking for more space within the same footprint. This includes additional features including a fridge, additional storage, zoned lighting and hard flooring.

Our focus on technology and system upgrades continues, and this year we have replaced our food & beverage system, adding new functionality and enhanced capability to over 220 hotels with a bar café and are seeing the positive impact.

We continue to be focused on cost efficiency, with a long-established programme in place, focusing on in-sourcing, automation and innovation. We have enhanced our procurement capabilities and continue to in-source operational activity to further improve quality and efficiency.

We have made steady development progress and so far, this year we have opened two new leasehold hotels in the UK. The pace of new leasehold openings reflects the continued development challenges in the UK, impacted by high construction costs, planning timeframes and the availability of financing. We have also opened a freehold hotel in Bilbao, Spain, and have a good pipeline of development opportunities. Overall, we expect to open five new hotels across the UK and Spain in 2026.

As previously announced, planning permission has been granted for the conversion of the office building we own in St Paul’s to a 95-bed hotel and we are progressing with planning permission for the office building in Liverpool Street and expect a decision before the end of the year.

Safety & Security

The safety and security of customers in our hotels is extremely important and we want everyone to be safe, and feel safe, in our hotels. We have acted quickly to make changes to improve safety and security across our operations. The following actions have already taken place:

An independent review led by Paul Greaney KC, a leading barrister specialising in public inquiries concerning security, serious violent crime, and health and safety, to examine our room access security policies and escalation procedures
A partnership with a leading Violence Against Women and Girls expert who are delivering a tailored programme of senior leadership training. They have reviewed our existing policies and procedures and will assist with how we respond to the independent review and its recommendations, with the intention to continue to develop the partnership in the future
Ongoing working with UK Hospitality, participating in their Guest Security Working Group, helping to develop industry Guest Security Principles & Good Practice guidance, which aims to promote best practice across the hospitality sector
An internal review, which is ongoing, and making a number of changes as a result, including changes to our room access security policy. Any additional or replacement room key now requires explicit permission from the guest staying in the room. This builds on our existing policy to never confirm to any third party that a guest is staying at one of our hotels
A new room access security policy, now live across all 600+ hotels, backed by training for our 12,000 customer-facing colleagues and ongoing independent audit and mystery shopper programmes
Management consultancy AlixPartners have been brought in to assess, audit, build and reinforce the work underway, provide additional expertise, and support our continued action around safety, customer security and operations
A completed deadbolt audit across all UK rooms, confirming all key-card doors have a secondary deadbolt
Ongoing proactive engagement with Parliament, Government, and UK Hospitality’s Guest Security Working Group.

Current trading and outlook: robust performance driven by strong growth in Spain, medium-term growth fundamentals unchanged

So far in Q3, the MSE competitive segment has seen solid year-on-year growth. London has performed strongly, driven by events in the first week of the quarter, offsetting modest declines in the regions. Travelodge grew like-for-like RevPAR in Q3 to date by c. 1%, however in recent weeks RevPAR has been broadly in line with last year’s levels. In the year to date we have performed in line with the MSE segment, with good demand and outperformed on occupancy, with absolute occupancy approximately 6% points ahead of the competitive segment. We underperformed on rate, primarily in the regions.

Booked revenue levels are in line with 2025, there is good leisure demand supported by strong long lead event bookings and reflecting the events programme that last year was weighted towards Q3. Corporate demand remains weaker, impacted by low levels of construction activity. Our forward visibility remains limited as usual, in line with normal trading patterns.

Our Spanish business continues to perform well with revenues c. 20% ahead of 2025 levels.

Overall, total revenues for the quarter to date, including the contribution from new and maturing hotels are 3% ahead of 2025 levels.

We continue to manage inflationary pressures through our long-established efficiency programme, leveraging in-sourcing, technology, automation and innovation, while maintaining investments in growth and quality. We continue to expect costs to increase in line with our previous guidance, with gross cost inflation of 6%-7.5% in 2026, partially mitigated by our ongoing efficiency programme, resulting in expected net cost inflation of 5%-6.5% (before new hotels), excluding any potential impact from current economic and geopolitical uncertainty.

Looking ahead, we are mindful of the macroeconomic and political uncertainties impacting consumer and business confidence, alongside further cost pressures arising from the Employment Rights Act and Tourism levies. Nevertheless, the UK MSE segment remains resilient, benefiting from its domestic focus, broad range of customers and focus on value that continues to resonate.

Travelodge is well positioned for medium-term growth, supported by our direct distribution model and broad range of customers, alongside the investments we are making in the UK and Spain that are delivering positive results. We remain confident in the structural outlook for the budget hotel sector, supported by resilient fundamentals and an attractive supply backdrop.

ENDS

Enquiries:

FGS Global

Tel: 0207 251 38 01

Email: Travelodge-LON@fgsglobal.com

About Travelodge

Travelodge is one of the leading platforms in the UK and is the second largest hotel brand in the UK with 632* hotels and approximately 49,000* guest bedrooms, right across the UK as well as in 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, with over two-thirds of the room estate now featuring the new look and feel across refits and new hotels. 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.

*as at 30 June 2026