Highlights (quarter ended 30 September 2021, comparison vs 2019)

  • Total revenue up 9.9% to £229.5m (2019: £208.8m, 2020: £88.2m)
  • RevPAR([1]) up 11.8% to £53.54 (2019: £47.89, 2020: £21.24)
  • RevPAR performance 17.8pts ahead of the competitive segment([2])
  • Occupancy(1) down (1.1)pts to 83.6% (2019: 84.7%, 2020: 51.7%)
  • Average room rate(1) up 13.3% at £64.04 (2019: £56.53, 2020: £41.11)
  • EBITDA([3]) profit of £134.0m (under IFRS 16) (2019: £111.5m, 2020: £31.0m)
  • EBITDA (adjusted)([4]) profit of £87.0m (2019: profit of £57.5m, 2020: profit of £4.1m)
  • Cash of £151.4m at 30 September 2021
  • 15 new hotels opened
  • Total network now 593 hotels and 45,285 rooms as at 30 September 2021

Craig Bonnar, Chief Executive commented: “Following the lifting of all Covid-19 restrictions Travelodge has delivered a record trading performance in quarter 3. We saw a significant increase in demand post 19 July, with very strong levels of domestic leisure demand across the UK this summer, good ‘blue collar’ business demand and we also benefited from the reduced VAT rate."

“The budget segment continues to recover ahead of the total UK market, and Travelodge has continued its seven-year track record of outperformance against the market segment. Whilst forecasting remains a challenge, and we continue to face a range of possible outcomes, we expect to return to 2019 RevPAR levels during 2022, driven by continued leisure and ‘blue collar’ business demand offsetting a slower recovery in ‘white collar’ corporate demand."

"With our large network of hotels stretching the length and breadth of the UK, a strong brand heritage which appeals to a wide mix of customers and our low cost business model, we are well positioned to benefit from the on-going recovery and future growth opportunities. So, whilst we do continue to face uncertainty in the short-term, we remain confident in the long-term prospects for budget hotels."

Performance Overview

The budget market remains resilient, with revenue as a percentage of 2019 levels ahead of the total hotel market, driven by the strong levels of domestic leisure demand and a good recovery in ‘blue collar’ business demand.

Overall UK like-for-like RevPAR for the third quarter was up 11.8% on 2019 levels, approximately 17.8pts ahead of the STR MSE benchmark competitive segment.

Total revenues for the third quarter were up 9.9% on 2019 levels driven mainly by strong leisure demand and benefiting from the lower VAT rate, peaking in August, with accommodation revenue up c. 30% on 2019 levels.

Costs remained well controlled and whilst Travelodge is not immune to the supply chain pressures affecting the wider hospitality industry, these have been well managed, supported by our in-sourced housekeeping model and strong supplier relationships.

EBITDA (adjusted) for the third quarter was £87.2m (2019: £57.5m, 2020: £4.1m).

We ended the period with cash of £151.4m.

Recent Trading

The MSE segment continues to recover ahead of the UK market and in recent weeks is seeing revenue as a percentage of 2019 levels around 15% points higher than the total hotel market, driven mainly by domestic leisure demand.

We have continued to outperform the STR MSE benchmark segment with UK like-for-like RevPAR performance in the first weeks of the fourth quarter c. 11% above 2019 levels and approximately 12pts([1]) ahead of the competitive segment with London and the Regions both outperforming.

The cash position remains strong.

Outlook

Forecasting remains a challenge and we expect the recovery will depend on several factors including the continued effectiveness of the vaccines, consumer and business behaviour and more broadly the general economic environment. Also, we do face some short-term uncertainty around cost headwinds, particularly the increase in the National Living Wage and employer National Insurance Contributions.

The MSE segment is expected to continue to recover fastest, benefiting from its domestic focus, business/leisure mix and value proposition. We expect to return to 2019 RevPAR levels during 2022, with sustained ‘blue-collar’ business demand, and strong leisure demand offsetting a more gradual recovery in ‘white collar’ corporate demand.

We expect to open six new hotels in 2022, lower than our long run averages, as new deals were impacted by Covid-19 in 2020, but returning to more normal levels thereafter.

With our large diversified network of hotels, strong brand, direct distribution model, value proposition, customer mix and domestic travel focus, Travelodge is well positioned to benefit from any recovery as demand builds. So, whilst we do continue to face material uncertainty in the short-term, we remain confident in the long-term prospects for budget hotels.

[1] 30 Sep 2021 to 3 Nov 2021

[1] Revenue per available room, Average room rate and Occupancy on a UK like-for-like basis for the management accounting period 1 Jul 2021 to 29 Sep 21, 2 Jul 2020 to 30 Sep 2020 and 4 Jul 2019 to 2 Oct 2019 for the quarter. Revenue per available room, Average room rate and Occupancy on a UK like-for-like basis for the management accounting period 31 Dec 2020 to 29 Sep 21, 2 Jan 2020 to 30 Sep 2020 and 3 Jan 2019 to 2 Oct 2019 for the quarter.

[2] Our competitive segment is the Midscale and Economy Sector of the UK hotel market as reported by Smith Travel Research (STR), an independent hotel research provider, providing aggregate benchmarking information on the UK and other hotel market performance

[3] EBITDA = Earnings before interest, tax, depreciation, amortisation and non-underlying items presented on an IFRS basis – including IFRS 16.

[4] EBITDA (adjusted) = Earnings before interest, tax, depreciation and amortisation, and before rent adjustment and non-underlying items, and in line with historic accounting principles (before IFRS 16). This measure reflects the cash benefit of rent reductions following the CVA which completed on 17 June 2020. Non-underlying items have been removed as they relate to non-recurring, one-off items.

About Travelodge

Founded in 1985, Travelodge is Britain's very first budget hotel chain and today is one of the largest budget hotel chains in the UK, with a portfolio of over 600 hotels and over 46,000 bedrooms across the UK, Ireland and Spain.

In Spain, Travelodge has an established profitable presence and as of April 2024, its portfolio doubled to 12 hotels, having recently acquired a further six properties. Travelodge has ambitious growth plans within this market and has identified the top 20 key locations where it would like to open additional hotels in Spain.

Welcoming over 22 million guests annually across the UK, Ireland and Spain, the majority of Travelodge hotels are located in major cities, towns and holiday hotspots as well as by airports and key business hubs. With 90% of its hotels rated 4* or above on

TripAdvisor, Travelodge is proud to offer guests across its diverse customer base a good value experience – whether they are travelling for business or leisure. In 2023, approximately 50% of rooms were sold for less than £60.

Whether out celebrating a birthday, going to a concert or sporting event, visiting friends and family, taking a business trip, working away from home, or taking a short break, we help people to go and do their thing by Being the Brilliant Base.

Travelodge continues to invest in its ongoing hotel refit programme which is expected to see 50% of the Travelodge room estate upgraded to its new design by the end of 2024. The brand is also continually evolving its quality offering to deliver a better experience for its diverse mix of business and leisure guests such as its new look Bar Cafe design, 85 Bar Café, which has been rolled out to selected UK hotels as part of the refit programme.

Travelodge is focussing on its environmental and social impact, with sustainability integral to its business strategy. It's Better Future sustainability plan aims to build a more sustainable future for its customers, colleagues and the planet, and it is underpinned by three core pillars: Inclusive – ensuring we are accessible, inclusive and well-priced to our customers and colleagues; Caring – creating a caring and healthy environment for our colleagues and customers and ensuring their wellbeing; and Conscious – Travelodge is conscious of its impact on the planet, taking into account the waste it produces, the energy and other resources it consumes and the carbon emissions it generates.

For further information visit travelodge.co.uk or the Travelodge Hotels Limited LinkedIn page.

The Travelodge Press Office
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Travelodge