Travelodge unveils aggressive expansion strategy

Budget hotel chain Travelodge has unveiled an aggressive expansion strategy for 2008 and plans to open 44 new hotels across the UK, nearly double the number it launched last year.

The company is currently building 24 properties with planning secured on a further 42 hotels and 205 in the pipeline.

Travelodge said that current trading is strong and reported record room sales for 2007, which climbed 14% to 5.5 million.

The company said revenue increased 20% to £243.8m in the year to 31 December 2007, with EBITDA (earnings before interest, tax, depreciation, and amortisation) up 30% to £55.8m, mainly due to a strong London market and improved cost controls.

It added that 2007 marked its first significant move outside the UK committing €1b (£785m) to open 100 hotels in Spain by 2020.

Travelodge chief executive officer Grant Hearn said the group's performance in 2007 was "outstanding".

"We delivered strong growth in sales and operating profit as our no frills offer gathers real momentum," he said.

"In the last three years Travelodge has focused on taking share from three- and four-star hotels but also growing the overall hotel market. We are stealing shares from B&Bs, mid market and upmarket hotels."

Travelodge declined to comment on reports suggesting a merger with rival budget hotel chain Premier Travel Inn, a move that would create a company worth around £3b.

Huge growth predicted for budget sector >>

Travelodge to invest £14m on new hotels >>

By Gemma Sharkey

E-mail your comments to Gemma Sharkey here.