Travelodge’s return to TV advertising fuels 15% revenue hike

Travelodge has noted a near 15 per cent revenue boost to £497.2m in 2014 thanks to its ongoing investment in improving the customer experience and a refreshed advertising strategy.

The hotel chain embarked on a £100m modernisation programme two years ago which has seen the redesign of 90 per cent of its hotel rooms. This was supported by its largest ever ad spend as it returned to TV for the first time in four years with a £25m campaign to get Britain “to get up and go”.

The investment in communicating the modernisation of budget rooms has paid off. According to its full year results, Travelodge saw a 16.8 per cent increase in revenue per available room (RevPar) to £34.24 versus £29.32 in 2013.

Overall, average room rate was up 15.1 per cent to £45.33 while occupancy rate was up one percentage point to 75.5 per cent.

Visits to the Travelodge website also ran close to the one million mark every week.

Chief executive Peter Gowers claimed the reinvigorated brand now achieves 90.5 per cent recognition among UK consumers.

“The value hotel market is performing well and new Travelodge is delivering strong outperformance. Customer feedback on our changes has been excellent and we have seen strong growth from business customers. The improved guest experience and effective yield management have led to significant profit growth,” he said.

Gowers added that the momentum in 2014 has continued into the first quarter of 2015, with RevPar already up 17.6 per cent.

It has also targeted the rollout of the brand to at least 250 further sites across the UK.

The BBC reports that Travelodge owners are understood to be looking to appoint advisers to examine strategic options, including a stock market flotation or sale for a potential £1bn.

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