Travelodge revenues leap as it aims to create 3,000 new jobs

Team members from Travelodge's York hotels
Team members from Travelodge's York hotels
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Budget hotel chain Travelodge, which has 35 hotels in Yorkshire, said revenue jumped 9 per cent to £693m in 2018 thanks to its focus on location, price and quality.

The group said these are uncertain times and it is not immune from the short-term challenges, but it is confident there are more opportunities ahead.

Travelodge said it has been actively investing in York over the past year. In December it opened its sixth hotel in York and has become the city’s largest branded hotel operator.

York Monks Cross Travelodge is the first hotel to be located at Monks Cross Shopping Park, representing an investment of £7.5m for the landlord and creating 26 new jobs within the community.

Earlier in 2018, the company chose York from hundreds of its UK locations as one of five launch locations for its new “budget chic” hotel format, Travelodge PLUS, at its York Micklegate Travelodge.

In August 2017, Travelodge opened its largest hotel in the city, York Central Layerthorpe Travelodge. The 127-room hotel with Bar Cafe is located in the city centre and represented an investment of over £5m and created 47 new jobs.

The budget hotel chain is set to create 3,000 new jobs over the coming years as it continues to expand with the opening of around 100 new hotels over the next five years.

The group said adjusted earnings rose £10m to £122m in the year to December 31.

Travelodge’s chief executive Peter Gowers said the results were helped by investment in price and quality.

“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 of the impact of significant cost increases, citing the National Living Wage and business rates, although it added that it has successfully navigated these challenges.

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 rose 3.2 per cent last year as Travelodge opened 17 hotels, with a further three in the current quarter.

The firm now has a network of 575 hotels 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 £250m and earnings more than trebled under a five-year transformation plan, spearheaded by Mr Gowers.

Travelodge recently launched a new recruitment programme in Yorkshire targeting mums and dads who are looking to get back into work.

The hotel chain is offering employees working hours that fit around the school run, a work buddy and access to management training.

The programme is designed to attract some of the UK’s two million plus unemployed parents into hospitality, as part of Travelodge’s plans to open 100 hotels over the next five years, which will create up to 3,000 new jobs.