Proactive Investors - Travelodge has reported a bumper 2022, as customers opted for budget hotels with the cost-of-living crisis tightening spending.
Sales in the period jumped 25% versus pre-pandemic levels to reach £909.9mln, with revenue per average room also vaulting around 24% to reach £52.59, the group’s latest update revealed.
EBITDA soared by 162% in 2022 to reach £213mln in comparison to 2021’s £81mln.
Profit margins also recovered to just over 23%.
“The budget hotel sector in general, and Travelodge in particular, continues to demonstrate resilience, as consumers seek out value in tougher times,” chairman Martin Robinson said.
“I am therefore confident that the encouraging trading and positive momentum we have witnessed in early 2023 will continue amidst the uncertain macroeconomic backdrop.”
However, the privately-owned hotel operator is still vulnerable to inflation and is bracing for costs to increase by 7%-8% over the current year.
The budget hotel has also begun reigniting growth plans in Spain, opening a site in the country for the first time in over a decade.
The company targets a further eight new openings globally by the end of 2023, as it warned that Covid 19 and the challenging real estate sector had limited its pipeline.
Chief executive officer, Jo Boydell remains bullish on budget hotels going forward, something that could be music to the ears of Premier Inn owner Whitbread (LON:WTB) and Holiday Inn’s IHG (LON:IHG).
“We expect the segment to benefit from staycation demand, downtrading to budget hotel operators, changes in working patterns, events and also indirectly from inbound tourism as a result of the weak pound,” Boydell concluded.