Bad weather and ‘softer market demand’ dampens trading at Travelodge

Travelodge has reported a quiet dip in in average daily rate (ADR) and RevPAR (revenue per available room) for the six months ended 30 June 2024.

 

ADR was down by 2.4% to £64.68 as a result of less market demand due to fewer events and bad weather, while like-for-like UK RevPAR also decreased by 1%, though that figure is still 35.6% above 2019 rates.

 

Meanwhile, its EBITDA (earnings before interest, taxes, depreciation and amortisation) also took a hit, falling from £104.5m in H1 2023 to £77m in H1 2024 as a result of a £12m new advertising campaign, as well as other planned long-term investments to its estate, such as its accelerated refit programme.

 

However, the hotel group said it was able to drive occupancy through “resilient customer demand from both leisure and business guests”, which enabled the group to deliver revenue growth of 1.7% to £486.7m.

 

It added the results were in “line with expectations” considering the inflationary cost pressures, the recent freehold acquisitions from LXi REIT plc for £210m, and “softer market demand, especially in London” as a result of events being “below 2023 levels”.

 

During the period, Travelodge also opened five hotels in the UK, while Spain remains a “key growth market” for the brand.

 

Jo Boydell, chief executive of Travelodge, said: “UK revenues in the third quarter to date are modestly below 2023 levels but we were encouraged by improving trends during July, with UK revenues ahead of 2023 in that month. Forward bookings are also positive, with booked revenue to the end of the year ahead of 2023 levels at this point, driven by strong event demand.

 

“Our strong financial position, combined with our affordable proposition and diversified, increasingly well invested hotel network, position us well for long-term growth.”

 

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