Travelodge upbeat over half-year results despite profit pressures

Travelodge Group has described its half-year or H1 results, ending 30 June 2025, as a “solid first-half performance given the challenging market backdrop”.

 

The budget hotel brand, which operates more than 610 hotels, reported revenue of £471.3m down from £486.7m year-on-year, reflecting softer demand, particularly in London.

 

Group earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at £47.3m for the first six months of the year, down from £82.1m in H1 2024.

 

The group pointed to profits impacted by around £20m of inflationary cost increases, as well as approximately £9m due to the annualisation of the 2024 and 2025 increases in the National Living Wage of 10% and 7% respectively, alongside National Insurance Contributions coming into effect from April 2025.

 

Occupancy levels stood at over 82% for the period thanks to both leisure and business travel. Travelodge said guests were staying with the brand for big ticket events including Six Nations Rugby and the Oasis and Coldplay concerts, while major industry events such as Infosecurity Europe and the Global Offshore Wind Conference saw demand for business bookings.

 

Travelodge is in the middle of its largest development programme in over a decade, with 11 new UK hotels opened this year and at least another nine expected by the end of the year. Key new openings included Manchester Central Riverside Travelodge and Liverpool Central Queens Dock & Arena.

 

The group also completed the acquisition of an office building in Central London, opposite Liverpool Street station, to be converted to a hotel subject to planning.

 

Travelodge said around 65% of its estate are now fitted with next-generation rooms, while the business has also enhanced its digital proposition with its new mobile app, which includes a trial of self-serve check-in and its new AI assistant Ara.

 

Jo Boydell, chief executive of Travelodge, said: “Travelodge delivered a solid first-half performance given the challenging market backdrop. As previously highlighted, demand was softer in the first half, particularly in Greater London, and event phasing has shifted more activity into the second half of the year. Profits were impacted by approximately £20m of inflationary cost increases, including around £9m from National Living Wage uplifts and additional National Insurance costs.

 

“Despite these headwinds, our diversified business and leisure customer base supported strong occupancy of over 82%, and the performance of our Spanish business was a particular highlight, delivering strong revenue and profit growth.

 

“We are undertaking our largest development programme in over a decade – having opened 11 new UK hotels so far this year, with at least nine more to come in the second half, and continuing with upgrades across our estate, with approximately 65% of our rooms now refitted to next generation standards. Alongside this, we continue to enhance our customer proposition through digital innovation and new features, including the rollout of the ‘Choose Your Room’ customer feature; our first hybrid ‘StaySmart’ hotel, which offers flexible self-serve check in options via mobile app, kiosk, or reception; and a new AI assistant, Ara – all supporting long-term growth and quality.

 

“Looking ahead, we are encouraged by the improving trading conditions we have seen in the third quarter so far, with total revenue to-date around 4% ahead of last year, and forward bookings to the year-end also ahead of 2024 levels, supported by strong event demand, although with the normal limited visibility. While the macroeconomic environment remains uncertain, we are confident in our strategy and are well-positioned to deliver sustainable growth over the medium-term.”

 

Travelodge’s Spanish business also continued to perform strongly, with revenues up around 30% and EBITDA increasing by over 30% to £4.8m, up from £3.6m the previous year.

 

Photo: AlmacUK/Shutterstock