Budget hotel group Travelodge has said it enjoyed more bookings around Wimbledon and Justin Timberlake concerts but flagged lower room prices dragging on its sales.
The company reported revenues of £786 million for the nine months to the end of September, about 0.5% higher than the £782 million reported this time last year.
This was driven by it opening five new hotels in the UK, including two in London and one in Bristol, as well as five sites in Spain.
“Resilient” demand from leisure and business travellers in the UK led to a slight increase in the number of rooms being occupied over the period, Travelodge said.
But this was offset by lower room costs, particularly in London.
It said bookings slowed in October due to poor weather and there being fewer events, but they have started to pick up in more recent weeks, particularly in regional locations.
Jo Boydell, Travelodge’s chief executive, said: “Bookings in the quarter were supported by leisure events such as Wimbledon, the British Grand Prix, Kings of Leon and Justin Timberlake music concerts, as well as business meetings and events such as the European Society of Cardiology event at ExCeL London and the Farnborough International Airshow.”
But she said the firm is continuing to “navigate the impact of inflationary cost pressures” which include higher energy costs and successive increases in the national living wage.
Furthermore, Travelodge estimates the combined impact of another minimum wage hike in April and a higher rate of employer national insurance will push up costs by about £21 million next year.
This is on top of ongoing cost inflation affecting the business.
Travelodge said it is minimising costs as much as possible, including by using robot vacuums across its hotels.
“While macroeconomic uncertainty persists amidst a challenging operating environment for the sector, we remain confident in the long-term prospects for the budget hotels and future growth opportunities for Travelodge,” Ms Boydell added.
