Travelodge proudly announces its exceptional performance for the nine months ending on September 30, 2023, showcasing a remarkable surge in revenue and profit compared to 2022 figures. The company recorded an impressive 16.7% rise in revenue, totalling £782.0 million, and a substantial 22.4% boost in underlying earnings (adjusted EBITDA), reaching £201.2 million. These extraordinary results underscore the enduring strength of the UK budget hotel segment and the broad appeal of Travelodge's quality and value-driven offerings.
These stellar outcomes, consistently surpassing competitors in the midscale and economy hotel sector, are attributed to robust demand from Travelodge's diverse customer base, spanning leisure and business travellers.
Leisure travel has thrived, with individuals visiting loved ones, embarking on short getaways nationwide, or attending prominent events like the Edinburgh Festival, Wimbledon, the British Open, and various music festivals, including Reading Festival and Creamfields.
Furthermore, Travelodge continues to experience robust business travel demand, catering to a wide range of clientele from tradespeople to FTSE 100 business executives. Face-to-face business networking conferences, such as the Defense and Security Equipment International (DSEI) conference at ExCel London, have contributed significantly to this demand.
Looking ahead, Travelodge maintains its momentum with a strong start in the fourth quarter, where accommodation revenue has surged approximately 6% compared to 2022 levels and an impressive 46% compared to 2019 figures.
Travelodge remains committed to driving long-term growth by enhancing its offering in terms of location, price, and quality to cater to all travel needs. The company's ambitious hotel refit program is well underway, with 25% of hotels set to undergo a transformative upgrade to a new design by the end of 2023. Plans for 2024 include accelerating investment to upgrade approximately 50% of the room estate by the end of the year, featuring revamped reception areas, next-generation rooms with convenient bedside charging ports, blackout curtains, and upgraded bar cafes.
In September 2023, Travelodge unveiled its "Better get a Travelodge" multi-million-pound advertising campaign across various media platforms, including TV, radio, digital, and out-of-home.
Additionally, Travelodge is making operational investments to enhance quality metrics further, including replacing thousands of carpets and upgrading all coffee machines across the estate starting in 2022.
As part of its expansion plans, Travelodge has opened four hotels (308 rooms) during the year to date. Notably, the company inaugurated its sixth hotel in Madrid, Spain, in October, presenting significant growth opportunities in a market with strong demand from business and leisure travellers and limited branded budget hotel options. Travelodge has identified the potential for an additional 15,000 branded rooms in the budget segment within the next five years and has already secured a deal for a newly built hotel in San Sebastian.
In the UK, Travelodge anticipates opening six new hotels in 2024, with plans to return to more regular development levels, unveiling between 15-20 new hotels per year as market conditions improve. Following a comprehensive market gap analysis, the company continues to identify over 300 target locations and explores extension opportunities across its existing estate.
Travelodge looks forward to benefiting from several positive demand drivers, including increased demand for budget hotel accommodations, staycation preferences, and the revival of events, along with indirect support from inbound tourism. The company's strong brand, commitment to quality, and value proposition, coupled with a well-invested and diversified hotel network, position it favourably for sustained growth.
Despite the UK's challenging and somewhat unpredictable macroeconomic landscape, Travelodge remains confident in the long-term prospects for budget hotels. The company's business model and track record of exceptional performance ensure it will continue to thrive amidst uncertainty.
Jo Boydell, Travelodge's Chief Executive, expressed her satisfaction with the quarter's record performance, highlighting the ongoing demand from Travelodge's diverse customer base. She emphasized the company's dedication to growth through ongoing investments, room and hotel transformations, and strategic advertising efforts. Boydell concluded by reaffirming Travelodge's commitment to providing affordable accommodations and delivering long-term growth, thanks to its well-invested and diverse hotel network.
We invite you to share your thoughts on Travelodge's impressive achievements in the comments below.