Staycation boom drives third quarter revenue at Travelodge

Budget hotel group Travelodge has reported a 9.9% increase in revenue to £229.5m in its third quarter financial results, driven by a strong domestic leisure market and good recovery in ‘blue collar' business offsetting a more gradual recovery in ‘white collar' corporate demand.

However, the business said it was "not immune" to supply chain pressures and warned there was "some short-term uncertainty around cost headwinds", particularly the increase in the National Living Wage and employer National Insurance Contributions.

For the quarter ended 30 September 2021, the group reported revenue per available room (revpar) was up 11.8% to £53.54 against the same period in 2019.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was £134m, up from £111.5m in 2019, while average room rate was up 13.3% at £64.04 although occupancy was down to 83.6% (against 84.7% in 2019 and 51.7% in 2020).

At the end of the period, Travelodge had 593 hotels and 45,285 rooms with 15 additions to its portfolio this year and six expected to open in 2022. The group also had cash of £151.4m.

Chief executive Craig Bonner said: "Following the lifting of all Covid-19 restrictions Travelodge has delivered a record trading performance in quarter three. We saw a significant increase in demand post 19 July, with very strong levels of domestic leisure demand across the UK this summer, good ‘blue collar' business demand and we also benefited from the reduced VAT rate.

"The budget segment continues to recover ahead of the total UK market, and Travelodge has continued its seven-year track record of outperformance against the market segment.

"Whilst forecasting remains a challenge, and we continue to face a range of possible outcomes, we expect to return to 2019 revpar levels during 2022, driven by continued leisure and ‘blue collar' business demand offsetting a slower recovery in ‘white collar' corporate demand."

Photo: Shutterstock / chrisdorney