Travelodge remains cautious about the immediate future despite economic uncertainty driving demand for budget hotels.
The message was delivered by chief executive Peter Gowers as the 564-hotel chain reported adjusted half year earnings [ebitda] up by £1.3 million to £43.3 million.
Revenue in the six months to June 27 rose by 8% to £317.2 million on the same period the previous year.
This came as revenue per available room (revpar) increased by 3.1% to £38.68 as occupancy went up by 2.1 percentage points to 75.6% and the average room rate was maintained at £51.14.
The company said its revpar growth was 2.7 percentage points ahead of rivals.
Six new hotels opened in the first half, with three since the end of June. A total of 20 are due to open this year.
A plan to upgrade wi-fi across the portfolio has made “good progress” with half of Travelodge hotels offering improved speed and reliability.
Gowers said: “While the UK continues to face economic uncertainty, demand for budget hotels remains strong and more and more businesses are choosing the budget sector.
“Although the general economic picture, the impact of new supply growth and clear short-term cost headwinds lead us to remain cautious about the immediate outlook, our strategic focus and growing pipeline will position us well as these pressures abate.”
The company continued to outperform the midscale and economy market segment in the first half of 2018.
“Our focus on location, price and quality is paying off with another period of increased occupancy,” added Gowers.
“We now offer UK travellers more choice than ever, with a modernised core estate, our premium economy ‘SuperRooms’ and our new ‘Travelodge PLUS’ format.
“The recent opening of our new flagship hotel with 395 rooms in the heart of the City of London is a major milestone, highlighting just how far Travelodgehas come since we opened our first small hotel by the roadside in 1985.”
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