Travelodge UK: Detailed PEST Analysis for the Budget Hotel Market

This report presents a detailed PEST (Political, Economic, Social, and Technological) analysis of Travelodge UK, the second-largest budget hotel chain in the United Kingdom. It begins with an overview of Travelodge's target market, including demographic, psychographic, geographic, and behavioral variables. The PEST analysis examines the external factors impacting the business, such as political policies, economic trends (including staycation popularity and tourism revenue), social factors (like brand perception and social media impact), and technological advancements (online booking systems and future technology). The report concludes with strategic recommendations for Travelodge's marketing efforts, based on the findings of the PEST analysis, considering the competitive landscape and opportunities for growth. The analysis references various books and online resources to support its findings.

Travelodge Company PEST Analysis
This report will be providing a detailed analysis of the existing Budget Hotel market, and how to
improve the competiveness of the Travelodge UK, the second largest Budget Hotel chain in the
United Kingdom, Second Premier Inn. This report will contain the following, a profile of the
organisation’s current target market, which will include demographic, psychographic, geographic and
behavioural variables. That will then be followed by a well-referenced and well-researched PEST
analysis that will highlight the most important and relevant factors that could have an impact on the
business. Once the pest analysis has been completed, the report will be concluded by recommended
changes to the marketing based upon the findings of the PEST analysis.
Brief Introduction to Travel lodge
Travelodge Hotels Ltd (Travelodge) is a budget hotel company based in the UK. The company was
established in 1985 by Lord Forte. Travelodge operates more than 500 hotels with over 37,000 rooms
located in major cities and regional centres in the UK; 11 hotels in Ireland and four hotels in Spain. It
operates hotels under the Travelodge brand. The company serves around 17 million customers every
year. The hotels also have bar cafe and restaurants which offer breakfast, lunch and dinner with
varied cuisines. It serves over two million breakfasts every year. Furthermore, the company provides
online and mobile reservation applications services. Travelodge is headquartered in Thame,
Oxfordshire. With being a budget hotel chain, the rooms and facilities are low priced and most
branches are located, in many town and city centres across the United Kingdom and Ireland, with
other locations purposely placed near all United Kingdom major tourist attractions, for example many
of the major cities have more than one Travelodge within the city, specifically located to suit the
customer needs, for example, Birmingham has 10 Travelodge branches with a 10 mile radius of the
city centre.
According to the ACORN categorization of UK consumers stated in Dibb, S (2012) the main category
of customers would be in the ‘Comfortably Off’ category. The town and city centre hotels target many
demographic variables of the target, with the main customers being families and group holidays on
city/weekend breaks. The low price appeal mainly to these segments as most families in the lower-
middle/working class cannot always afford to stay at more premium higher end hotels, while for group
bookings it is just a much easier option due to the central locations and the lower prices, an example
of a type of group would be hen/stag parties with ages varying from 18 to over 60 on a weekend
break in one of many of the UK’s lively nightlife destinations. The hotel is also good for business
groups or individual business partners having an overnight stay. The Behaviouristic variables of show
that the brand loyalty of Travelodge.

Political
Travel lodge created a policy statement in order to demonstrate their commitment to the privacy of
their customers. By using Travelodge hotels, their website, their dedicated telephone reservations line
and any line or any other service of Travelodge Hotels Ltd, the customer is agreeing and giving their
consent to the practised outlined in the statement issued in the privacy policy stating that they will
always handle information in compliance with the Data Protection Act (1998). In april 2011,
Travelodge launched the UK’s First budget hotel management apprenticeship programme for school
leavers. The scheme, JuMP, is a fast track route into management and provides Alevel studnets with
a real alternative with the chance of going to university. The programme provides a chance for the
school leavers to continue their education, obtain work experience, receive a salary and become a
manager by the age of 21. To date, travelodge has over 80 apprentieces participitating on the course
in hotels across the UK.
The Economical Factors
UK tourism has weathered the double dip recession but 18% fewer people are holidaying abroad than
before the downturn, a new study shows. The number of trips taken by Britons overseas has declined
by 12.6 million, from 69.4 million to 56.8 million between 2007 and 2011, according to the research by
Travelodge. This means that 5.9 million holidays and trips have come out of the market altogether
when the number of domestic holidays and trips are factored in. This is shy of the government’s
stated ambition for domestic trips to replace the number of missing overseas trips, the report
says. However, the analysis shows that ‘staycation’ breaks were up by 5.6% as the recession proved
that holidays are an essential rather than a luxury. UK city breaks account for 23% of domestic
tourism but seaside towns are in decline by 5%. Total tourism revenue was up 12.6% to £40 billion
between 2007-2011 against the general economy up 8%. Employment numbers in tourism have
bucked the wider trend, thanks to strong growth in 2011 when 120,000 new jobs were created. The
UK’s appeal as a tourist destination endured during the double dip, with overall visitor numbers up by
3.1% to 157.4 million, the report shows. Staycations form the backbone of the tourism economy, with
domestic trips and holidays increasing by 5.6% to 126.6 million.
Social Factors
Travelodge is seen as a sociably acceptable hotel regarding to trust pilot, although there are many
mixed reviews from that site and other sites such as tripadvisor. The use of social media can help
attract customers but also put some customers off as one negative review can have a bigger effect
than 10 positives combined. Travelodge has given its £15m media planning and buying account to
Interpublic’s Initiative UK as part of its £223m brand investment programme. Initiative has been
tasked with overseeing the media planning and buying ahead of a major campaign which will launch
in spring 2014. The programme, announced earlier this year, is the biggest marketing push for the
company to date and has involved the roll out of a new room design as well as an extensive
refurbishment programme across all of the company’s hotels.
Technologic
Statistics brain stated that in 2012 57% of all hotel reservation bookings where made online, with 65%
of same day bookings made on a smartphone. With online bookings becoming more and more

popular as technology, Travelodge have set up a very easy and understandable booking system
online and a specially designed mobile compatible page. When making an online booking, like many
other booking websites, Travelodge have tactically placed multiple add-ons in a last attempt to gain
more profit from the booking customer, these include breakfast & dinner, Wi-Fi, early check in and
also some hotels offer pet facilities. The six-month, ‘Travelodge Future of Sleep’ study, carried out by
award-winning futurologist Ian Pearson, has investigated the impact of new technology on sleep and
how the hotel room of the future will respond to helping us sleep better in 2030. Within the next two
decades, the hotel room will be so technologically advanced that it will almost be alive – fulfilling
guests’ needs like a personal concierge, lifestyle coach, fitness trainer, psychologist and doctor.
Cutting-edge technology will monitor customers’ energy levels, physical well-being, emotions and
mood to help ensure they achieve a good night’s sleep.
The Sleep Revolution Key findings from the study revealed that by 2030, a good night’s sleep will
provide recreation, training and medical monitoring, as well as rest and rejuvenation. By 2030 we will
be able to manage the contents of our dreams as in the movie ‘Inception’. Video, audio, smells and
tactile experiences produced using our bed or bed linen will play a key role in helping to make our
dreams feel real. We will be able to replay our favorite dream from a menu just like choosing a movie.
Also, we will be link into dreams with our partner or family and friends and enjoy a shared dream
experience.
Strategic analysis of Travelodge & recommendations
Of the four sections of the marketing mix: price, product, place and promotion, Travelodge capitalizes
on price. Its leadership in putting the price at a low level is its competitive edge. This is how the hotel
chain attracts budgets and practical travelers. For the well-heeled tourist, Travelodge’s service is a
disadvantage. Its weakness lies in the cutting frills the well-off tourist looks for in a comfortable hotel
stay, but while the hotel chain does away with the Class A and B tourist, it has opened a flashflood of
markets from the C and D category. Premier Inn is the main competitor to Travelodge although they
offer a price that is £15 dearer than Travelodge’s £24. Aside from the price premier in makes it a point
that it’s a hotel with a restaurant or pub either attached or in the vicinity of the location. Considering
that the UK has a culture of drinking alcohol, Premier in has an advantage over Travelodge in this
field, although most city centre and airport hotels now serve alcohol and food. At the current
Travelodge is still behind Premier inn with the latter having a 41% share in 2012 to the 31% of
Travelodge. Travelodge with its aggressive price strategy and customer friendly and convenient
website the company is gaining upon its rival with claims that the Premier inn are over relying on their
unreliable website. Travelodge is on its way to leading the budget hotel chain with pricing strategy
and website technology. With a majority of the travelers relying on online reservations, the World
Wide Web can be tapped as a marketing strategy. Travelodge has very competent executives and
has hired experts with a background in state of the art IT systems.
References
Books Used Marketing Concepts & Strategies – 6th Edition – 2012 Dibb, S. Simkin, L. Pride, W.M.
Ferrel, O.C. Marketing Management – 14th Edition – 2012 Kotler, P. Keller, K Strategic Market
Management – 8th Edition – 2008 Aaker, D.A. URL’s used for PEST www.travelodge.co.uk
www.premierinn.co.uk

http://www.thedrum.com/news/2013/10/23/initiative-uk-wins-15m-travelodge-media-planning-and-
buying-account http://www.hotel-industry.co.uk/category/legal-and-tax-issues/
http://www.bighospitality.co.uk/Legislation/Travelodge-writes-to-local-councils-in-development-
partnership-plea http://www.marketingweek.co.uk/3012706.article
http://www.marketingweek.co.uk/news/travelodge-gears-up-for-budget-hotel-battle/4009192.article
http://www.marketingweek.co.uk/news/-qa-travelodge-sales-and-marketing-director-catriona-
kempston/4006128.article http://www.statisticbrain.com/internet-travel-hotel-booking-statistics/
http://www.hotel-industry.co.uk/category/legal-and-tax-issues/
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