UK budget hotel brand Travelodge expects to see continued pick-up in demand from business travellers during 2022 following a quick recovery from the blip caused by the Omicron variant of Covid-19.
Travelodge said that January’s sales had been affected by the Omicron outbreak and the government’s work-from-home guidance, which was in place in the UK until 26 January.
But bookings soon recovered in February and were “almost immediately ahead of 2019 levels”, thanks to strong leisure demand and a recovery in “blue-collar” business demand.
“We expect 2022 to benefit from sustained ‘blue-collar’ business demand, and strong leisure demand, offsetting a more gradual recovery in ‘white collar’ corporate demand,” said Travelodge as it announced its financial results for 2021.
“We do however face a number of cost headwinds, including the significant inflationary pressures facing the wider UK economy.”
Travelodge recorded total underlying revenue of £559.8 million in 2021, which was down by 23 per cent on 2019’s revenue of £727.9 million, but was nearly double 2020’s revenue of £284.4 million.
The chain’s occupancy levels at its 592 hotels reached 62.6 per cent last year, up from 40.8 per cent in 2020 but still down from 80.6 per cent in 2019. Average room rate reached £52.77 in 2021, which was slightly higher than the rate of £52.20 achieved in 2019.
This improved trading allowed Travelodge to make an adjusted profit of £81.1 million in 2021, compared with a loss of £74 million in 2020.
Martin Robinson, Travelodge’s chairman, said the brand had “reinforced its position as a resilient business” during a “challenging” 2021.
“Trading so far in 2022 has been extremely encouraging, despite a slow start amid the Omicron restrictions in January, and we are excited to launch our new budget-luxe hotel design (Travelodge PLUS), which offers a more premium look and feel,” added Robinson.
“This is our most radical brand transformation to date and has been created in response to Britain becoming a nation of budget travellers, with more of us choosing to stay in budget hotels.”
“The budget hotel segment, whilst not immune from the broader economic uncertainty, has proven resilient and continues to recover ahead of the rest of the UK hotel market; and we believe that the opportunities to grow our business have never been more exciting.”
Travelodge plans to roll out its Travelodge PLUS design to another 60 hotels in 2022, including properties in “popular” business destinations in the UK.
The chain also expects to open six new leased hotels in the UK and one franchise property in Ireland during 2022.