Travelodge has revealed a slump in profits for the past six months after it was impacted by weaker demand in London and soaring labour costs.
The hotel group also revealed a dip in revenues but bosses said it reflected a “solid” half-year in the face of “challenging” market conditions.
The firm, which operates about 610 hotels, saw revenues slip by 3.2% to £471.3 million for the six months to June 30, compared with the same period last year.
Travelodge said this was linked to “softer market demand, particularly in Greater London”.
Bosses said the group was impacted by a quieter events schedule over the first half of the year, despite boosts from the Six Nations Rugby, Radio One Weekend in Liverpool and the Grand National over the first half.
Chief executive Jo Boydell told the PA news agency has already seen a benefit from events in the second half of 2025, including from Oasis’ reunion gigs, Coldplay concerts and bookings for the Women’s Rugby World Cup.
The hospitality company said it has seen “improved trading conditions” in recent weeks, with revenues up 4% year-on-year for the third quarter of 2025 to date.
This has been supported by “solid” trading in London and the regions, as well as positive forward booking.
It comes as Travelodge pushes forward with a major development programme which saw it open 11 new hotels so far this year, with at least nine more expected by the end of 2025.
On Thursday, it also reported earnings of £47.3 million for the half-year, sliding from £82.1 million a year earlier.
Travelodge said this was linked to the fall in UK revenues and industry-wide cost inflation.
It also came under pressure from a jump in labour costs linked to the Government’s previous autumn budget, with increases to the national minimum wage and national insurance contributions (Nics) coming into force in April.
Ms Boydell said: “Demand was softer in the first half, particularly in Greater London, and event phasing has shifted more activity into the second half of the year.
“Profits were impacted by approximately £20 million of inflationary cost increases, including around £9 million from national living wage uplifts and additional national insurance costs.
“Despite these headwinds, our diversified business and leisure customer base supported strong occupancy of over 82%, and the performance of our Spanish business was a particular highlight, delivering strong revenue and profit growth.”
