Budget hotel chain Travelodge has reported a slight increase in bookings around events such as Wimbledon and Justin Timberlake concerts, despite lower room prices impacting its sales.
The company posted revenues of £786m for the nine months to the end of September, a marginal 0.5% increase from the £782m reported during the same period last year. This was largely due to the opening of five new hotels in the UK, including two in London and one in Bristol, as well as five locations in Spain.
“Resilient” demand from both leisure and business travellers in the UK led to a slight uptick in room occupancy over the period, according to Travelodge. However, this was counterbalanced by lower room rates, particularly in London. The company noted a slowdown in bookings in October due to poor weather and fewer events, but said they have started to rebound in recent weeks, especially in regional locations.
Jo Boydell, Travelodge’s chief executive, said: “Bookings in the quarter were supported by leisure events such as Wimbledon, the British Grand Prix, Kings of Leon and Justin Timberlake music concerts, as well as business meetings and events such as the European Society of Cardiology event at ExCeL London and the Farnborough International Airshow.”
Despite this, she acknowledged that the firm is still grappling with “navigate the impact of inflationary cost pressures”, which include higher energy costs and successive increases in the national living wage. Moreover, Travelodge estimates its business costs will rise by approximately £21m next year.
The upcoming minimum wage increase in April, coupled with a higher rate of employer national insurance, is expected to inflate tax bills. Travelodge has been actively reducing costs where possible, even deploying robot vacuums throughout its hotels.
“While macroeconomic uncertainty persists amidst a challenging operating environment for the sector, we remain confident in the long-term prospects for the budget hotels and future growth opportunities for Travelodge,” stated Ms Boydell.
This post was originally published on here
