- Q3 income development of + 0.5% to £786.1 million (2023: £782m) pushed by opening of 5 new UK lodges in London Bermondsey, Rotherham, Colchester, Bristol and London Oval and efficiency in Spain together with 5 new freehold Spanish lodges, with resilient UK buyer demand from leisure and enterprise clients driving a slight improve in occupancy, offset by a decline in room charges
- Group comparable EBITDA of £187 million, while persevering with to navigate ongoing inflationary value will increase, together with successive will increase within the Nationwide Residing Wage, lease evaluations and better vitality prices
- Expanded and optimised property portfolio: opened 5 new UK lodges in YTD; agreed to accumulate six lodges in April 2024 (with 5 accomplished to this point) doubling Spanish presence; and publish interval finish acquired St Paul’s workplace constructing for lodge conversion
- Improved buying and selling in current weeks: current buying and selling simply barely beneath 2023 ranges, ahead reserving patterns are constructive, with robust lengthy lead occasion demand and booked income forward of 2023
Travelodge has carried out in step with expectations in opposition to the market backdrop, benefitting from stable buyer demand from a various mixture of each enterprise and leisure clients. Occupancy was barely forward of 2023 ranges however there was softer market fee, notably in London. We continued to put money into the enterprise, whereas navigating the affect of inflationary value pressures. Bookings within the quarter have been supported by leisure occasions comparable to Wimbledon, the British Grand Prix, Kings of Leon and Justin Timberlake music concert events, in addition to enterprise conferences and occasions such because the European Society of Cardiology (ESC) occasion at ExCeL London and the Farnborough Worldwide Airshow.
We continued our strategic funding in development and high quality throughout the interval, together with accelerating our refit programme – our most important model transformation to this point, with 50% of our rooms to be refitted by the top of this yr, supported by our multi-channel promoting marketing campaign.
We’ve got opened 5 new lodges within the UK and bought 5 freehold lodges in Spain within the yr to this point, doubling the presence of our extremely worthwhile Spanish enterprise. Publish-period, we additionally accomplished the acquisition of a main freehold workplace constructing in St Paul’s, London, for lodge conversion. We see rising development alternatives, together with potential going concern acquisitions and rebrands within the UK and Spain, constructing on our robust observe document of supply, in addition to additional freehold acquisitions to reinforce worth.
Buying and selling within the fourth quarter is modestly beneath 2023 ranges however reveals an bettering development with the newest weeks simply barely beneath 2023 ranges. Ahead reserving patterns are constructive, with robust lengthy lead occasion demand and booked income for the rest of the yr forward of 2023. Whereas macroeconomic uncertainty persists amidst a difficult working atmosphere for the sector, we stay assured within the long-term prospects for the price range lodges and future development alternatives for Travelodge. Our robust monetary place, reasonably priced proposition and diversified lodge community positions us properly for long-term development. Jo Boydell, Travelodge Chief Government
Travelodge Group, the UK’s first price range lodge model which operates greater than 600 lodges, in the present day proclaims its outcomes for the 9 months ended 30 September 2024. Travelodge delivered a 0.5% improve in income to £786.1 million (2023: £782 million), reflecting resilient market demand from its various vary of leisure and enterprise clients, albeit with a tougher fee atmosphere. The Group reported a comparable Group EBITDA of £187 million and Travelodge OpCo delivered a comparable EBITDA of £178 million (2023: £195.2m), whereas navigating ongoing inflationary pressures, together with successive will increase within the Nationwide Residing Wage, lease evaluations and vitality prices.
Through the interval, Travelodge continued investing to drive development and high quality. This contains Travelodge’s refit programme – the Group’s most important model transformation to this point – which can have refitted c. 50% of the room property by the top of 2024 and is delivering constructive business and buyer advantages. The Group’s multi-channel promoting marketing campaign is having a constructive affect, together with driving site visitors to the web site and bettering model metrics.
General, demand from Travelodge’s various vary of enterprise and leisure clients stays resilient. The areas carried out properly, with occupancy forward of final yr and charges broadly in line. London noticed weaker efficiency on account of decrease charges and the deliberate phasing of the accelerated refit program. Regardless of poor climate and fewer occasions, leisure visitors used Travelodge’s reasonably priced and high-quality lodging as a base for main occasions like Wimbledon, the British Grand Prix, and Kings of Leon and Justin Timberlake music concert events, whereas enterprise visitors attended conferences and business occasions such because the European Society of Cardiology (ESC) occasion at ExCeL London and the Farnborough Worldwide Airshow.
Early This autumn buying and selling was impacted by poor climate and fewer occasions in October, however current weeks present enchancment, simply barely beneath 2023 ranges, with the Areas forward, however London nonetheless behind on fee. Ahead reserving patterns are constructive with robust lengthy lead occasion demand and booked income to the top of the yr forward of 2023.
Continued development and optimisation of portfolio in UK and Spain
Travelodge has opened 5 new lodges within the UK within the yr to this point, together with London Bermondsey, Rotherham, Colchester, Bristol, and London Oval. The enterprise expects to open 5 further new UK leasehold lodges in 2025.
In Spain, Travelodge is concentrated on increasing its robust and worthwhile presence available in the market, pushed by acquisitions along with good leisure and enterprise demand. In April, Travelodge agreed to accumulate six freehold lodges, doubling its presence to 12 lodges, with 5 of the six now accomplished and buying and selling underneath the Travelodge model and the sixth on account of full by the top of the yr.
In November, Travelodge acquired a 24,000 sq. ft. Central London workplace constructing in St Paul’s for conversion right into a 95-room lodge, pending planning permission. This primary, standalone freehold acquisition helps Travelodge’s technique to diversify its freehold/leasehold combine to reinforce worth, whereas sustainably repurposing vacant buildings and bringing them again into financial use.
Travelodge has visibility of potential further development alternatives, together with freehold and leasehold going concern alternatives within the UK and Spain, constructing on its robust observe document of supply, and additional freehold acquisitions.
Outlook: resilient buyer demand, good value management and clear development plans
Wanting forward, regardless of macroeconomic uncertainty, Travelodge is assured within the long-term prospects for price range lodges and its future development alternatives.
The current Price range confirmed that the Nationwide Residing Wage will improve by 6.7% from April 2025, following the c. 10% improve in April 2024, rising prices by c. £12 million. As well as, employer Nationwide Insurance coverage contributions will improve by 1.2% to fifteen% from April 2024, alongside a discount within the threshold that employers begin to pay Nationwide Insurance coverage, from £9,100 to £5,000 that’s anticipated to extend prices by c. £9 million. We estimate the mixed affect of those wage value modifications to Travelodge in 2025 is c. £21 million.
Travelodge is assured in its robust working mannequin, persevering with its value effectivity program to mitigate these pressures as a lot as doable. The enterprise continues to include expertise to reinforce the visitor and colleague expertise and drive operational effectivity, together with the roll out of robotic vacuums to enhance high quality, reduces bodily calls for on colleagues and improve effectivity.
General, buyer demand is resilient throughout our vary of enterprise and leisure segments. Coupled with beneficial UK market provide dynamics, Travelodge is optimistic in regards to the future buying and selling atmosphere. The enterprise stays centered on leveraging its development levers, together with via additional freehold acquisitions within the UK and Spain. With a powerful model, direct distribution mannequin, resilient demand, well-invested lodge community and environment friendly operations, Travelodge is properly positioned for achievement.
About Travelodge
Based in 1985, Travelodge is Britain’s very first price range lodge chain and in the present day is likely one of the largest price range lodge chains within the UK, with a portfolio of over 600 lodges and over 47,000 bedrooms throughout the UK, Eire and Spain.
In Spain, Travelodge has a longtime worthwhile presence and as of April 2024, its portfolio doubled to 12 lodges, having not too long ago acquired an extra six properties. Travelodge has bold development plans inside this market and has recognized the highest 20 key places the place it wish to open further lodges in Spain.
Welcoming over 22 million visitors yearly throughout the UK, Eire and Spain, the vast majority of Travelodge lodges are positioned in main cities, cities and vacation hotspots in addition to by airports and key enterprise hubs. With 90% of its lodges rated 4* or above on TripAdvisor, Travelodge is proud to supply visitors throughout its various buyer base a great worth expertise – whether or not they’re travelling for enterprise or leisure. In 2023, roughly 50% of rooms have been bought for lower than £60.
Whether or not out celebrating a birthday, going to a live performance or sporting occasion, visiting family and friends, taking a enterprise journey, working away from house, or taking a brief break, we assist individuals to go and do their factor by Being the Sensible Base.
Travelodge continues to put money into its ongoing lodge refit programme which is predicted to see 50% of the Travelodge room property upgraded to its new design by the top of 2024. The model can be frequently evolving its high quality providing to ship a greater expertise for its various mixture of enterprise and leisure visitors comparable to its new look Bar Cafe design, 85 Bar Café, which has been rolled out to chose UK lodges as a part of the refit programme.
Travelodge is focussing on its environmental and social affect, with sustainability integral to its enterprise technique. It is Higher Future sustainability plan goals to construct a extra sustainable future for its clients, colleagues and the planet, and it’s underpinned by three core pillars: Inclusive – guaranteeing we’re accessible, inclusive and well-priced to our clients and colleagues; Caring – making a caring and wholesome atmosphere for our colleagues and clients and guaranteeing their wellbeing; and Acutely aware – Travelodge is aware of its affect on the planet, bearing in mind the waste it produces, the vitality and different sources it consumes and the carbon emissions it generates.
For additional info go to travelodge.co.uk or the Travelodge Lodges Restricted LinkedIn web page.
