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Travelodge owners mull £1b sale amid strong results

13 April 2015 by
Travelodge owners mull £1b sale amid strong results

Budget hotel chain Travelodge has hailed a strong set of results, as it emerged that the group could be sold for up to £1b.

The company reported a 14.9% rise in total revenues to £497.2m for the year 31 December 2014, and EBITDA up 63.5% to £66.2m.

Meanwhile revpar increased 16.8% to £34.24 (£29.32 in 2013), and average room rate rose 15.1% to £45.33. Occupancy was also up by one percentage point to 75.5%.

Travelodge said it expected the strong performance to continue into 2015, with revpar in Q1 of 2015 up 17.6% on the same period the year before, and EBITDA for the 12 months to the end of Q1 2015 up to £77.3m.

The company attributed the performance in part to its £100m modernisation programme, with 90% of its guest rooms now modernised. It said average TripAdvisor scores had risen to four out of five for the modernised hotels.

The news comes as it was reported in the Times that owners Goldman Sachs, Avenue Capital and GoldenTree Asset Management are considering a sale of the business in the next nine to 12 months, or a possible flotation. A sale is expected to be worth around £1b.

The move is thought to have been prompted by a turnaround in fortunes for the hotel group, which has come through a difficult period, having entered a Company Voluntary Arrangement (CVA) in 2012, after it was sold by Dubai International Capital to its current owners.

Travelodge has 501 hotels, with plans to open another 15 this year.

Peter Gowers, Travelodge chief executive said: "The value hotel market is performing well and new Travelodge is delivering strong outperformance. Our £100m modernisation programme is nearing completion. New king-size Travelodge Dreamer® Beds have been introduced in every UK hotel and 90% of our UK rooms now feature our new room design. Customer feedback on our changes has been excellent and we have seen strong growth from business customers. The improved guest experience and effective yield management have led to significant profit growth.

"The momentum we saw in 2014 has continued into the new year and we have seen an encouraging start to 2015. The value hotel market remains strong and we continue to outperform our competitive set. We see considerable potential for further like-for-like sales growth and are targeting the roll out of the brand to at least 250 further sites across the UK."

Former IHG boss in Asia-Pacific appointed chief executive of Travelodge >>

Travelodge to open 15 hotels in 2015 >>

Grant Hearn steps down as chief executive of Travelodge >>

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