Travelodge has announced a revenue increase of 20%, as speculation mounts that it will merge with fellow budget chain Premier Inn.
Rooms sold in 2007 increased by 14% to 5.5 million and EBITDA (earnings before interest, taxes, depreciation and amortization) rose 30%. The growth was driven by a strong London market and improved cost controls, said the company.
Travelodge is continuing its expansion plans, with 44 hotels expected to open in the UK this year.
CEO Grant Hearn said: “We are stealing share from B&Bs, mid market and upmarket hotels as their customers seek genuine value from the budget sector. We are now also attracting 500,000 more low income families than in 2005, including first time users from the camping and caravanning markets.”
The results came as reports claimed that Whitbread, the owner of Premier Inn, is at the early stages of talks with Travelodge to create one dominant force in the budget market.
Travelodge is owned by Dubai International Capital, a private equity group, and the combined group could be worth £3 billion.
Travelodge and Premier Inn declined to comment.