Q&A: Travelodge CEO Guy Parsons

We catch up with the CEO of budget hotel operator Travelodge Guy Parsons as it opens its 500th hotel near the Olympic Stadium in Stratford.


Marketing Week (MW): Travelodge has announced a large London expansion programme – what’s driving this?

Guy Parsons (GP): The focus for us is looking far more at London than perhaps we have done. Then opportunity is so great and extends beyond Zone 1. We offer great locations because of the rail links, for instance Crossrail means many people will come and stay here [Stratford]. We did not build Stratford just to take advantage of the Olympics, that’s a short-term event. We need to make sure we have enough demand for the next few decades.

MW: What do you hope will be the legacy for the hotel industry from the Olympics?

GP: We genuinely hope that the Olympics are going to showcase all that’s best about Britain along with the Diamond Jubilee. If you look at all the coverage of the fantastic sites of London from last year’s Royal Wedding, it’s PR most brands would die for. I think this year we have a great opportunity to really showcase London and Great Britain. One of the misperceptions about the UK is that it is expensive and with our brand we think we think we offer great value -we have to maximise the interest that will inevitably grow as a result of the Olympics.

MW: What are the strengths of the Travelodge brand?

GP: We are fortunate that we still have vast awareness in the sector and that’s immensely useful for us. People know we provide good quality accommodation at a great price. The other core brand advantage we have is the size of our website – 90% of our bookings come through the website.

MW: It’s two years since the introduction of the teddy bear character Mr Sleep to your marketing to boost “emotional warmth”. Will this strategy change?

GP: Our strategy is still to show there’s more to us than just price. We actually own price in the marketplace but it’s only when we talk to our most popular customers that we hear about the other great things they love about the brand. A lot of that is to do with our people. Mr Sleep has delivered a lot of the things we wanted him to deliver but watch this space.

MW: What are your channels for customer feedback and benchmarking?

GP: We use Net Promoter Score (NPS) and have been doing so since 2005. Every customer that stays receives a questionnaire and all the hotels review them on a weekly basis. We are able to correlate high NPS scores to the best levels of profitability and if the NPS ends up falling we are getting a quick piece of feedback and can take some action. We also do a usage and attitude survey every two years and we do stay very attuned to exactly what customers are looking for. Because we are a privately-owned organisation and don’t have as much ‘red tape’ we can act very quickly.

MW: How are you using digital channels beyond the website?

GP: We have a Facebook site and we use Twitter and we also monitor what goes on TripAdvisor. It’s important for us to promote ourselves and a way of taking direct customer feedback.

MW: Competitor Premier Inn has just reported a 0.9% drop in like-for-like revenues. What can you say about trading?

GP: We are trading very similar to Premier Inn. But you’ve got to compare performance with the previous year and the year before that. We have been opening new hotels in the last 12 months and that shows that the budget hotel sector is performing really strongly but we do reflect what is happening in the economy at large.

MW: Where do you see the opportunities going forward?

GP: There are still parts of the UK outside London that don’t have budget hotels yet and that’s still a large opportunity. Forty per cent of the UK population has not stayed in a hotel and alongside that 60% of hotels in the UK are still unbranded. We have an opportunity to improve the quality of accommodation in the UK.

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