Travelodge boss hits out at taxes risk

THE Travelodge chief executive has warned that soaring business rates and stifling Government taxes are putting job creation in the hospitality sector at risk.

Peter Gowers said that a string of costs facing businesses could result in some “unintended consequences”.

He said: “The Government is putting rocks in our rucksack, with the national living wage, business rates, the apprenticeship levy and pensions changes.

“It’s loading costs on to businesses and they need to be careful of unintended consequences.

“The hospitality sector has created thousands of jobs over the past few years, don’t choke it off.”

Parts of the sector – which generates £130billion in revenue for the British economy – are creaking under severe cost pressures.

Casual dining firms such as Byron, Prezzo and Jamie’s Italian have shut lots of restaurants recently, with all citing soaring costs.

Business rates in particular have been a bugbear for bricks and mortar firms, with billions added to bills following a highly criticised revaluation last year.

Despite cost pressures, Travelodge booked a 6.6 per cent increase in revenue to £637.1million last year, with operating profit nudging up £2.3million to £112.4million.

Mr Gowers said: “New hotels are driving sales and more business travellers are choosing budget hotels because the quality has rocketed and they are in good locations now.

“For example, we have one in the City near the Gherkin, not where you’d normally expect a Travelodge to be.

“People on a night out at a gig or concert are also able to afford staying at a Travelodge rather than travelling home, that’s helped our sales too.”

The group plans to open 100 more hotels over the next five years, creating 2,500 jobs.

The expansion and solid results mark a continued turnaround from when Travelodge went through a painful restructuring in 2012.

It saw GoldenTree Asset Management, Avenue Capital and Goldman Sachs take control of the company via a debt-for-equity swap from Dubai International Capital.

The trio have invested £150million since then and “remain supportive”, Mr Gowers said. Recruitment is on the agenda again this year with Travelodge set to open 20 new UK hotels, creating 550 new jobs and taking its total number of properties to 578.

‘Hospitality has created jobs – don’t choke it off’