Travelodge £½-BILLION in the Red
- – an “In My View”article by NIGEL WARD, reporting on the latest Travelodge figures – and what that may mean to SBC and its ratepayers. Plus – other Council news.
Thame & London Ltd – the parent company of Travelodge – has now published its Report on the trading figures for the first quarter of 2021.
I am the first to admit that my accountancy skills amount to very close to zero – certainly far less than those of SBC award-winning s.151 Finance Director, Mr Nick EDWARDS.
Fortunately, I am able to call upon the knowledge and skill-set of an eminently well-qualified expert, who has flagged-up these highlights from the Report’s Summary:
- Total revenue down 71.3% to £41.7m (2019: £145.2m, 2020: £129.5m)
- RevPAR(1) down 70.5% to £10.25 (2019: £34.73, 2020: £29.34)
- RevPAR performance vs 2019 5.1pts ahead of the competitive segment2
- Occupancy(1) down 43.6pts to 32.5% (2019: 76.1%, 2020: 67.2%)
- Average room rate(1) down 30.9% at £31.53 (2019: £45.64, 2020: £43.65)
- EBITDA(3) down £42.8m to a loss of £2.6m (under IFRS 16)
- EBITDA (adjusted)(4) loss of £46.1m (2019: profit of £1.7m, 2020 loss of £13.9m)
- Cash of £96.2m at 31 March 2021
When asked to reduce that to layman’s terms, this was my money guru’s response:
- Massive downturn in turnover of £46m in the first quarter of 2021 (to less than one-third of the 2020 figure).
- Total debt of almost HALF A BILLION POUNDS now owed to third-party lenders, as of 31st March 2021.
It is difficult to interpret these figures in any other way than as a clear indication that Travelodge is on the bones of its ass. I leave it to Mr EDWARDS to speculate as to how he believes this state of affairs is likely to impact on the prospects of Mr Richard (“Binman”) BRADLEY’s starring contribution to the Borough’s finances – bought by the Council for £14m when its value was only £7m. My source in Estates reckons its present value is no more than £1m. Mr BRADLEY’s ‘recommendation’ to Council makes £14m worth of Premium Bonds look like a prudent (iftimorous) investment. Instead, the Council looks to have blown £13m. of borrowed money – for which the ratepayers will foot the bill. Meanwhile, Mr BRADLEY feels he has the ‘right’ to resent criticism.
This is not the first time that I have commented on a Thame & London Ltd Travelodge Financial Report. Regular readers may recall my article of 18th February 2021, entitled “Travelodge ‘California’?“:-
The above-mentioned article contains a number of links to a whole series of articles covering the Travelodge ‘investment’ in considerable detail. It also contains a priceless quote from Labour Leader Councillor Steve SIDDONS which certainly bears re-inspection:
“We now find ourselves in the situation of negotiating through an independent third party with the Travelodge group which will result in the temporary loss of rental income to the council for a two year period before the previously agreed contractual rental income resumes after 2021 and over the remainder of the unexpired lease over 22 years.”
In the light of this most recent Report, Steve’s reference to a “temporary loss of rental income” takes on the appearance of delusional wishful thinking. The truth looks more like another financial train crash.
In other news, we welcome a new (well, a second-time-around) Mayor – Councillor Eric BROADBENT [Lab.] – and a new Deputy Mayor, Councillor Roxanne MURPHY [YCIA]. Bravo, Rox!
Councillor BROADBENT’s predecessor, Councillor Hazel LYNSKEY – arguably the most incompetent Chair ever to have graced (or disgraced) a Council – must be congratulated on (at long last) showing her true colours and resigning from the Conservative Group, milliseconds before being unceremoniously dumped.
Rather than an ‘open and transparent’ move to the Labour Group, with whom she has consistently voted (even in the two SIDDONS ‘No Confidence’ motions – and where she would likely be rewarded for her betrayal of her Conservative colleagues with a Cabinet Portfolio) – Councillor LYNSKEY has apparently elected to join up with two ‘unaffiliated’ earlier Tory defectors, Councillors Helen MALLORY and Andrew BACKHOUSE, in a move that reeks of personal animus rather than political conviction.
The present (and final) incarnation of Scarborough Borough Council looks less and less like an honourable and conscientious example of local government and more and more like an episode of the tasteless 80’s soap, Dynasty. Tacky.