Travelodge is reporting an increase in sales and profits for the first half of the year as more people book budget hotels.
The company’s revenue rose 8% to £317.2 million in the six months to June 27, while adjusted earnings grew £1.3 million to £43.3 million.
Travelodge said ‘economic uncertainty’ in the UK has helped boost demand for budget accommodation among consumers and businesses.
Travelodge chief executive Peter Gowers said: "In the first half of the year, Travelodge delivered strong revenue growth and has continued to outperform the midscale and economy market segment.
"Our focus on location, price and quality is paying off with another period of increased occupancy.
"We now offer UK travellers more choice than ever, with a modernised core estate, our premium economy ‘SuperRooms’ and our new ‘Travelodge PLUS’ format.
"The recent opening of our new flagship hotel with 395 rooms in the heart of the City of London is a major milestone, highlighting just how far Travelodge has come since we opened our first small hotel by the roadside in 1985."
"While the UK continues to face economic uncertainty, demand for budget hotels remains strong and more and more businesses are choosing the budget sector. Although the general economic picture, the impact of new supply growth and clear short-term cost headwinds lead us to remain cautious about the immediate outlook, our strategic focus and growing pipeline will position us well as these pressures abate.
"This good revenue growth has helped to mitigate the impact of the significant cost increases, particularly the National Living Wage and higher operational costs including the impact of occupancy increases.
"The demand for budget hotels remains good and in the early weeks of the third quarter we have seen modestly improved RevPAR growth in the segment, impacted by the good weather, and Travelodge has continued to outperform the segment. However, the significant cost pressures remain and will continue in the short-term."
