The recent riots that swept the UK have cost commercial property budget hotel chain Travelodge £1 million, after it received more cancellations than bookings
, particularly in the capital.
Some 81 commercial properties were located in areas caught up in the chaos and even though none were forced to shut, many of them received high levels of cancellations.
Travelodge, which has 480 commercial property hotels in the UK, Ireland and Spain, reported sales had increased 15% in the 13 weeks to August 30, as more cut-price deals were put on, including offering 1.5 million rooms at £19 or less.
However the group reported, sales would have been up 17% if it had not been for the riots and looting in several English cities last month, causing fearful travellers to cancel their bookings.
Chief executive Guy Parsons spoke of London in particular, stating “Images of London burning and shops being looted flashing around the globe stopped domestic and international travellers from leaving home. We had not seen so many cancellations since the beginning of the recession. London was the worst hit area because it is such a large tourist destination.
Other areas such as Birmingham were badly affected. Staff and customers found it extremely difficult to get in or out of the commercial property, when the police were forced to close the city centre.
As a result of this, the growth of the group was significantly down by two percentage points, costing the business a million pound loss.
In spite of the chaos caused, the budget commercial property chain saw a sales growth of 19% in London. Occupancy rates rose to 83%, after the brand cut prices by 5% to an average of £42 per room, to attract cash-strapped consumers. And with more Britons opting to have their holidays in the UK due to big financial cutbacks, Travelodge were able to reap the benefits.
Parsons reported “the staycation break has been bigger than ever this summer. He further added “in response to this growing trend, we took a strategic decision to focus on increasing occupancy rates by lowering prices, funded by our efficient low cost base and allocated 1.5 million rooms at £19 or less. This resulted in Travelodge’s coastal and tourist regions achieving high level occupancy throughout the summer.
However the group said it was cautious about its future trading as Britons face tough financial challenges until at least the end of next year and will continue to offer around 750,000 rooms at £19 or less to attract visitors.
In addition to this, Travelodge have exchanged on eight new London sites, bringing forward 801 rooms. The commercial property budget hotel group has invested £63.5m in the hotels, with the deals including the exchange of contacts to open a commercial property hotel within St Modwen and Rotch’s Wembley Central Square Development in North London.
The group has opened 22 new commercial properties in the year to date and will open 16 more by Christmas, creating a total of 163 new jobs. The hotel chain plans to grow the number of hotels to 1,100 and 100,000 rooms by 2025.
Previous Post
Guide to Selling your Commercial Property
