Travelodge offloads 38 hotels under CVA programme

07-Apr-2013 - Last updated on 20-May-2024 at 08:36 GMT

Eighteen Travelodge hotels have gone to new owners while 20 have fallen under franchise agreements

Budget hotel chain Travelodge has today moved a step closer to completing the offload of 49 hotels under its financial restructuring programme, with 18 properties transferring to new owners and 20 moving under franchise agreements.

Seven of those franchise contracts have been taken by motorway services firm Moto, with the remaining 13 going to individual operators. The hotels under new ownership have been snapped up by the likes of Best Western, Ibis and Metro Inns.

“It is great news that we have been able to find new operators and introduce franchise contracts for the majority of these hotels,” said Travelodge’s chief executive Grant Hearn.

“We were always confident that we would secure a future for these properties and the deals that have taken place just demonstrate the huge strength of the Travelodge brand and the success of our operations model.”

VIDEO: Grant Hearn's update

Last year Travelodge entered a Company Voluntary Arrangement (CVA) with its creditors,which has allowed the business to renegotiate rents and leases across its remaining 109 hotels. When complete, the restructuring will see Travelodge’s debt reduced to 329m and a further £75m injected into the business by three major investors for refurbishment work.

In the below video, Hearn told BigHospitality 'there is a very solid chance' that Travelodge would end up continuing to run a number of these hotels on a franchise basis, explaining it will be a 'happy ending' for the group.

Under the terms of the new franchise agreements, the hotels will indeed continue to be operated and managed by Travelodge. The new owners will be responsible for fully refurbishing these properties in line with Travelodge’s new room design and refurbishment programme which was launched earlier this year.

Speaking of that new room design, Hearn added: “Our £57million refurbishment programme is well underway and by the end of this year we will have refurbished more than 50 per cent of our hotel rooms.

“By autumn 2014, almost 90 per cent of Travelodge’s estate will incorporate the new room design. This equates to an average of more than 50 Travelodge rooms being refurbished every single day for the next 18 months.

“Initial feedback from our customers in regards to the new room design has been fantastic. There is no doubt the hero of our new room is certainly the Travelodge Dreamer bed.”

Business growth

Existing bookings at the hotels under new ownership have either been transferred to adjacent Travelodge hotels or will be honoured by the new operators.

Meanwhile, four of the properties under new ownership will be re-opened as new businesses - two are being converted into student accommodation and two will become meeting rooms and staff accommodation for JCB.

Travelodge will continue to work closely with the landlords of the remaining 11 hotels to find suitable new operators. These hotels will continue to operate under the Travelodge brand as normal.

“Going forward, we are very excited to continue to grow our business, strengthen our product offering and make Travelodge the best value hotel chain in the UK,” concluded Hearn.

The full exclusive video interview - in which Hearn speaks about his plans and aspirations for the Travelodge brand, and it’s on-going rivalry with fellow budget hotel operator, Premier Inn - will be appearing on the website this Wednesday (10 April).

Hotels moving to new operators: