Travelodge warns of £21m cost hike after Chancellor Rachel Reeves' Budget

Travelodge has disclosed that it is bracing for a £21m surge in costs in 2025, following Chancellor Rachel Reeves’ Budget.

The budget hotel chain has cautioned that the rise will be due to the combined effect of another minimum wage increase in April and a higher rate of employer national insurance set to inflate tax bills, as reported by City AM.

Travelodge stated that it is doing its utmost to keep costs down, including the use of robot vacuums throughout its hotels. Chief executive Jo Boydell commented: "While macroeconomic uncertainty persists amidst a challenging operating environment for the sector, we remain confident in the long-term prospects for the budget hotels and future growth opportunities for Travelodge."

The company also revealed that it saw an uptick in bookings around Wimbledon and Justin Timberlake concerts during the first three quarters of its financial year. The Oxfordshire-based firm reported revenue of £786m for the nine months to the end of September, approximately 0.5 per cent higher than the £782m reported this time last year.

This was driven by the opening of five new hotels in the UK, including two in London and one in Bristol, as well as five locations in Spain. .

"Resilient" demand from leisure and business travellers in the UK led to a slight increase in room occupancy over the period, according to Travelodge. However, this was counterbalanced by lower room rates, particularly in London.

The company noted that bookings had dipped in October, attributing the slowdown to inclement weather and a lull in events. However, they have observed an uptick in more recent weeks, especially in regional areas.