Travelodge has announced plans to open around 20 new hotels annually in the UK over the next three years– a fierce pace of expansion despite uncertainty around the implications of Brexit.

The hotel group on Monday reported a near 5 per cent rise in annual pre-tax profits to just over £110m for 2016, helped by a £100m hotel modernisation programme and a cost-cutting plan.

“The UK is still short of good quality low-cost hotels and notwithstanding the short-term economic uncertainty, we see considerable further potential to expand our network over the years ahead,” said Peter Gowers, the chief executive of Travelodge.

He said that although the “macroeconomic picture remains uncertain and there are increased cost pressures from the national living wage, business rates and other regulated cost increases”, the company is well-positioned “to benefit from the opportunities presented by businesses looking to reduce travel costs in uncertain times”.

Mr Gowers added that leisure travellers were also increasingly opting for “staycations” as an alternative to higher priced foreign travel, which was spurring demand.

The group last year opened 19 new hotels, including in London, Glasgow and Milton Keynes. On Monday it said that it has a “strong pipeline” and expects to open a similar number each year, on average, over the next three years.

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It said that precise timing was dependent on market conditions and planning approvals but that this year it expects to open 15 new hotels.

On Brexit, Travelodge said that it remains “relatively cautious about the immediate outlook” .

“However, we remain well positioned to benefit from demand from value conscious consumers and our strong and growing development pipeline.”