British budget hotel brand Travelodge expects to see a continued increase in demand from business travelers in 2022 after a rapid recovery from the severe blow caused by the Omicron variant of Covid-19.
Travelodge said January sales were affected by the Omicron outbreak and the government’s work-from-home guidelines, which were in place in the UK until January 26.
But bookings recovered quickly in February and were “almost immediately ahead of 2019 levels”, thanks to strong leisure demand and a pick-up in demand from blue-collar businesses.
“We expect 2022 to benefit from sustained demand from ‘blue-collar’ businesses and strong leisure demand, offsetting a more gradual recovery in demand from ‘white-collar’ businesses,” Travelodge said in the announcement. of its financial results for 2021.
“We do, however, face a number of cost headwinds, including significant inflationary pressures facing the wider UK economy.”
Travelodge recorded total underlying revenue of £559.8m in 2021, down 23% from 2019 revenue of £727.9m, but has almost doubled 2020 revenue by £284.4 million.
The chain’s occupancy levels at its 592 hotels reached 62.6% last year, down from 40.8% in 2020 but still down from 80.6% in 2019. The average room rate has reached £52.77 in 2021, which was slightly higher than the rate of £52.20 reached in 2019.
This improvement in trading saw Travelodge make an adjusted profit of £81.1m in 2021, compared to a loss of £74m in 2020.
Martin Robinson, chairman of Travelodge, said the brand had “strengthened its position as a resilient business” during a “challenging” 2021.
“Trading in 2022 so far has been extremely encouraging, despite a slow start amid Omicron restrictions in January, and we are delighted to launch our new budget luxury hotel design (Travelodge PLUS), which offers a more upscale look and feel,” added Robinson.
“This is our most radical brand transformation to date and was created in response to the fact that Britain has become a nation of budget travellers, more of us are choosing to stay in hotels on a low budget.”
“The budget hotel segment, while not immune to the wider economic uncertainty, has proven itself and continues to recover ahead of the rest of the UK hotel market; and we believe the Our business growth opportunities have never been so exciting.
Travelodge plans to roll out its Travelodge PLUS design to a further 60 hotels in 2022, including properties in “popular” business destinations in the UK.
The chain also plans to open six new leased hotels in the UK and a franchise property in Ireland in 2022.