Travelodge anticipates growth despite slow start to 2025

Travelodge, the budget hotel chain operating over 600 locations across the UK, Ireland, and Spain, has reported a modest increase in annual sales as consumers continue to prioritize experiential spending. However, the start of 2025 has been sluggish, even with a boost from major events like the Six Nations rugby tournament and Crufts dog show.

The company announced that its revenues for 2024 exceeded £1 billion, marking a slight increase of 0.1% compared to the previous year. Underlying earnings reached £224.1 million, although adjusted earnings fell by 11% to £211.5 million, impacted by softer market rates and ongoing inflationary pressures across the industry.

Occupancy rates improved marginally, driven by a rise in attendance at various events, including Wimbledon, the Cheltenham Festival, and concerts such as Taylor Swift’s Eras Tour, alongside business conferences. Despite this, Travelodge has noted a recent downturn in sales attributed to a decline in events and slower corporate demand, compounded by challenges in the broader market.

The revenue per available room—a crucial indicator of hotel demand—has also seen a slight year-on-year decline during the first quarter, predominantly influenced by decreased activity in London.

Jo Boydell, the chief executive of Travelodge, remarked, “The first quarter is typically quieter for Travelodge, and we have observed a slight decline in demand due to several external factors, including fewer events being held across the UK. However, we are encouraged by improving indicators, including strong long-lead event demand, with more events now announced for 2025 than in all of 2024. Leisure demand has been the strongest so far, boosted by events like the Six Nations rugby and Crufts.”

Boydell also highlighted positive signs for future demand in the construction sector. The group is implementing measures to counteract an anticipated £21 million impact this year from rising labor costs due to increases in national insurance and minimum wage. “Travelodge remains focused on managing inflation through its long-established cost efficiency program, leveraging in-sourcing, technology, automation, and innovation,” the company stated.