Travelodge boosted by rising demand for budget rooms amid economic uncertainty
TRAVELODGE has reported rising sales and profits in the first half of the year as more consumers and businesses opt for budget hotels amid the UK's economic slowdown.
The hotels chain saw revenue rise 8 per cent to £317.2 million in the six months to June 27, while adjusted earnings grew £1.3 million to £43.3 million.
The firm pointed to "economic uncertainty" in the UK, which has helped drive up demand for budget accommodation among consumers and businesses.
Boss Peter Gowers said: "While the UK continues to face economic uncertainty, demand for budget hotels remains strong and more and more businesses are choosing the budget sector."
However, Travelodge bemoaned the impact of "significant" cost increases, citing the National Living Wage and operational burdens, although it added that it has successfully navigated these challenges.
Like for like revenue per available room was up 3.1 per cent, helped by the re-opening of one of its London hotels.
"Travelodge delivered strong revenue growth and has continued to outperform the midscale and economy market segment.
"Our focus on location, price and quality is paying off with another period of increased occupancy," Mr Gowers added.
Travelodge opened 6 hotels in the period with a further 3 opened in the current quarter, including one at London City.
The firm expects to open 20 new hotels this year.
The results mark a continued turnaround from when Travelodge went through a painful restructuring in 2012.
It saw GoldenTree Asset Management, Avenue Capital and Goldman Sachs take control of the company via a debt-for-equity swap from Dubai International Capital.
The trio have invested over £150 million since.