Staycationers and corporate travellers buoy Travelodge

Holidaymakers looking for cheaper alternatives to foreign holidays and cost-conscious business travellers are being targeted by budget chain Travelodge.

The disclosure came as the company reported a £5 million rise in annual earnings [EBITDA] last year to £110.1 million, as revenue rose year-on-year by 6.8% to almost £598 million.

It opened 19 new hotels last year, bringing its total up to 543 – representing 40,847 rooms.

A further 15 hotels are set to open this year and as many as 25 in 2018.

Peter Gowers, Travelodge chief executive, said: “We continue to focus on offering great value for money and have seen record growth from business customers, who now account for more than half of our sales.

“The UK is still short of good quality low-cost hotels and notwithstanding the short-term economic uncertainty, we see considerable further potential to expand our network over the years ahead, and expect to open an average of 20 hotels each year over the next three years.”

He added: “Clearly the macroeconomic picture remains uncertain and there are increased cost pressures from the national living wage, business rates and other regulated cost increases.

“However, our growing brand reputation and strong development pipeline position us well to benefit from the opportunities presented by businesses looking to reduce travel costs in uncertain times and leisure travellers opting for staycations as an alternative to higher priced foreign travel.”

Its UK like-for-like average room rate in 2016 was up 3.1% to £51.70 (2015: £50.13), mainly driven by continued growth from business customers and improved conversion rates from its upgraded website.