The two giants of the UK budget hotel world, Premier Inn and Travelodge, are reported to be in talks about a merger that could create a £3 billion behemoth, according to reports in the Times.
Talks are understood to be in only the preliminary stages, but if they come to an agreement the new hybrid company would control over 50,000 rooms in budget hospitality – currently the fastest growing area of the UK’s hotel market.
News of the talks come soon after Whitbread said it hoped to save £25m annually by merging its Premier Inn hotels, Beefeater restaurants and Brewers Fayre pubs into a single business.
Although it will take a one-off hit of £35m, the group aims to make the savings by having hotels and pub restaurants on all of its sites.
Difficulties in obtaining planning permission for hotels has led the group to consider selling around 20 of its Beefeater or Brewers Fayre venues.
Premier Inn owner Whitbread lost out to Dubai International Capital (DIC) in a battle to buy Travelodge only a couple of years ago.
A merger now could raise issues around fair competition as the potential control of the budget hotel market would be enormous.
Both companies declined to comment on the speculation.