20th July 2015

Continuing Strong Growth and Accelerating Development Momentum

Financial Highlights

·         RevPar(1)up 15.2% to £35.87 (2014: £31.14); outperforming the market

·         Average room rate up 11.4% to £48.19 (2014: £43.27)

·         Occupancy up 2.4 percentage points to 74.4% (2014: 72.0%)

·         Total revenue(2)up 17.9% to £261.0m (2014: £221.3m)

·         LTM EBITDA(3)£90.1m (March 2015: £75.7m)

 

 

Operational Highlights

·         92% of UK guest rooms now modernised

·         Modernised hotels have average Trip Advisor rating greater than 4 out of 5 stars

·         Quality and consistency driving strong growth from business customers

·         Children’s beds driving higher occupancy from modernised family rooms

·         Excellent reaction to new ‘That’s Travelodgical’ advertising

·         New mobile app leading to improved booking conversion levels

·         Five new hotels opened in first six months of year

·         45 hotels and 3,600 rooms scheduled to open in next 24 months

·         Accelerating pace of new hotel contract signings

Peter Gowers, Travelodge Chief Executive commented:

“Customers are responding well to the upgraded quality levels driven by our £100m modernisation programme.  Businesses are choosing Travelodge in ever larger numbers and families have welcomed the introduction of separate beds for children.”

“Our development momentum is beginning to accelerate.  We opened 5 hotels in the first half of the year and we expect to open a further 45 over the next 24 months.”  

“We have already exchanged contracts for more new rooms in the first half of 2015 than we did in the whole of 2014.  Boosted by our strong trading performance and the attractions of the value segment, major developers and financial institutions are showing their confidence in the future of new Travelodge.”

Peter continued:

“Britain continues to be a nation of value seekers and the value hotel market continues to be the fastest growing part of the UK hotel industry.  New Travelodge is well positioned and we expect our strong trading momentum to continue into the second half of the year. “

 

Financial review

For the six months to 1 July 2015 financial results (unaudited) were as follows:

RevPar was up 15.2% to £35.87, again outperforming the Smith Travel Midscale and Economy Sector growth, which was up 9.6% for the same period.

Significant further growth from business customers was the principal driver of improved performance.  The increasing appeal of our modernised estate led to occupancy up 2.4 percentage points, to 74.4% (2014: 72.0%).   Together with effective yield management this improved performance resulted in an 11.4% increase in our average room rates to £48.19 (2014: £43.27). Total revenues were up 17.9% to £261.0m. 

Costs remain tightly controlled and EBITDA for the twelve months to 1 July 2015 was £90.1m.  This represents a significant further increase on the position at the end of the first quarter, when LTM EBITDA stood at £75.7m. 

Operational Review

In this our 30th anniversary year, we are delivering on our new Travelodge strategy.

We continue to invest in the quality and consistency of our hotels.  The new Travelodge Dreamer® beds have been installed in every UK hotel and 92% of our UK guest rooms are now modernised with our new look and feel.  Average Trip Advisor scores for our modernised hotels are now greater than four out of five stars.

The Travelodge brand continues to strengthen.  Customer reaction to our new ‘That’s Travelodgical’ campaign has been excellent and brand recognition is now approximately 90%.  Travelodge.co.uk now receives an average one million visits per week with a booking made on average every three seconds.  

We launched our new mobile app in May, featuring a new tool to allow customers to find the nearest Travelodge while travelling, and get immediate walking or driving instructions to it.  More than 85,000 customers have already downloaded the app and booking conversion rates for customers using the mobile app are significantly ahead of previous mobile website levels. 

With a combination of our strong brand and excellent web presence, approximately 90% of all bookings now come via our direct channels.

Development

We opened five new hotels and 435 rooms in the first six months of 2015, bringing our total number of rooms in the business to 38,665.  The new hotels extend our presence across the country, taking us to London Wembley, Southampton, Egham, Winnersh in the M4 tech corridor and Llandudno in North Wales.  We are on-track to meet our development milestones for 2015 and expect to open 45 hotels and more than 3,600 rooms over the next 24 months.

During the first half of 2015 we exchanged contracts for almost 50% more rooms than we exchanged in the whole of 2014. We are encouraged by these new agreements in high quality locations and with strong partners. 

 

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About Travelodge

Founded in 1985, Travelodge is the UK’s largest independent hotel brand.

 

There were 519 Travelodge hotels and 38,665 rooms in the UK, Spain and Ireland as at 30 June 2015.  Travelodge welcomes approximately 17 million customers every year and almost 10,000 colleagues work across the business.

Notes:

 

Financial results in this summary document are extracts from the management reporting of Thame and London Limited and its subsidiary companies, including Travelodge Hotels Limited.  All financial references in this summary document are unaudited.

 

Smith Travel Research (STR) is an independent hotel research provider, providing aggregate benchmarking information on the UK and other hotel market performance.

 

For further information, please contact:

 

Travelodge Press Office

01844 358 703

 

pressoffice@travelodge.co.uk