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Travelodge Group Expands UK and Spanish Presence Amid Q3 Revenue Growth – Image Credit Travelodge
Travelodge Group, a budget hotel brand with over 600 locations, has reported a Q3 revenue growth of 0.5% to £786.1 million for the nine months ending 30 September 2024. This slight increase was driven by the opening of new hotels in the UK and Spain, strong customer demand, and a modest rise in occupancy rates, offset by a drop in room rates.
The company’s EBITDA stood at £187 million, despite facing ongoing inflationary cost increases, including rises in the National Living Wage, rent reviews, and higher energy costs.
In its pursuit of growth and quality, Travelodge has opened five new hotels in the UK this year and acquired five freehold hotels in Spain, effectively doubling its presence there. The company also recently acquired an office building in St Paul’s, London, to convert into a hotel.
Despite an operating environment marked by macroeconomic uncertainty, Travelodge has expressed confidence in budget hotels’ long-term prospects and future growth. Q4 trading is just slightly below 2023, but forward booking patterns are positive, with strong long lead event demand and booked revenue for the remainder of the year ahead of 2023.
The company is also looking to expand its portfolio further in the UK and Spain, and it has identified potential growth opportunities, including possible acquisitions and rebrands.
Travelodge faces increasing costs in the near future, with the National Living Wage set to rise by 6.7% from April 2025 and employer National Insurance contributions increasing to 15% from April 2024. These changes are expected to increase costs by about £21 million. However, the company remains confident in its operating solid model and plans to continue its cost-efficiency program to mitigate these pressures.