Travelodge says earnings squeezed by higher minimum wage and rent inflation

Travelodge has said cost pressures from minimum wage increases and rent inflation weighed on its profits last year, but welcomed a raft of events bringing in more hotel guests in recent months.

The budget hotel chain also reiterated its apology to a guest who was sexually assaulted by a man who was given a key card to her room in 2022.

Travelodge, which runs 630 hotels across the UK, Ireland and Spain, said it was “deeply sorry for the distress experienced by the victim and for our handling of her case following a serious incident in our Maidenhead hotel”.

It has since made changes to its room access security policy and commissioned an independent review, the company said.

Travelodge was updating investors on its financial performance and revealed that revenues totalled £1.04 billion for 2025, which was 0.7% higher than the year before.

Sales have also been growing since the start of 2026, helped by fans flocking to events including the Six Nations rugby tournament and international show Crufts.

But Travelodge said cost pressures which were landing on the entire industry had squeezed profits over 2025, particularly the increase to the National Living Wage from April which led many hospitality businesses to put millions of pounds into raising pay for their staff.

It also highlighted ongoing rent cost inflation and more recent policy changes including to business rates which will also drive up business costs.

Despite efforts to control its expenses, including by turning to technology and automation, Travelodge said earnings before tax, interest and other costs fell to £176.7 million in 2025, from £213.3 million the prior year.

Jo Boydell, Travelodge’s chief executive, said the group’s earnings were hit by “significant industry-wide inflationary cost pressures, which were substantially mitigated by cost efficiencies and disciplined cost control”.

She said the business was “monitoring the potential impact from economic and geopolitical uncertainty on consumer and business confidence” but that she remained “confident in the structural outlook for the budget hotel sector”.