Travelodge turnaround continues as profits rise
Travelodge has reported rising annual sales and profits, with the budget hotels chain set to create 3,000 new jobs over the coming years as it continues to expand.
The group saw revenue climb 8.8% to £693.3 million in the year to December 31, while adjusted earnings grew £9.6 million to £122 million.
Boss Peter Gowers said the results were helped by investment in price and quality.
“Our strategic focus on location, price and quality has enabled Travelodge to deliver a set of excellent results.
“We extended our network of hotels, remained focused on delivering attractive prices and took another step forward on quality,” he said.
Travelodge has also benefited from more consumers and businesses opting for budget hotels amid the UK’s economic slowdown.
The firm warned that the economic situation remains “uncertain”, with Brexit storm clouds refusing to dissipate, causing alarm for businesses.
“These are uncertain times and we are not immune from the short-term challenges, but beyond, we remain confident that there are more opportunities ahead,” Mr Gowers added.
Travelodge also bemoaned the impact of “significant” cost increases, citing the National Living Wage and business rates, although it added that it has successfully navigated these challenges.
The group will also open around 100 new hotels over the next five years, creating 3,000 jobs.
Over 2018, Travelodge ended the practice of outsourcing housekeeping, bringing staff into direct employment, and abolished the use of zero-hour contracts.
It also took action on gender diversity and the majority of hotel managers are now women.
Like-for-like revenue per available room was up 3.2% last year as Travelodge opened 17 hotels, with a further three in the current quarter.
The firm now boasts a network of 575 in total.
The results mark a continued turnaround from when Travelodge went through a painful restructuring in 2012.
It saw GoldenTree Asset Management, Avenue Capital and Goldman Sachs take control of the company via a debt-for-equity swap from Dubai International Capital.
Since 2013, sales have risen more than £250 million and earnings more than trebled under a five-year transformation plan, spearheaded by Mr Gowers.