The privately-held owners of budget hotel chain Travelodge are eyeing a sale of the business for upwards of £1.2 billion (€1.4 billion), the Sunday Times first reported.
The planned sale by an investment consortium led by US asset management firm GoldenTree comes as the business has ridden out a bruising downturn during the pandemic as well as a much-publicised fallout with its landlords over non-payment of rent to see its revenue and profits boom.
The Sunday Times reports that its owner of nearly a decade is in talks with investment banks to explore a potential sale of the chain, which has 595 hotels.
In its latest financial results, it said revenues were 25% up from 2019 to £909.9 million, while pre-tax earnings for the year had lifted by £83.8 million to £212.9 million.
Travelodge’s attempts to reduce its rent payments during lockdown, which were ultimately approved via a company voluntary arrangement, became one of the most notable examples of the breakdown in relations between company owners and landlords during lockdown over who should foot the bill for the damage done to the leisure sector.
The CVA, rubberstamped in June 2020, was unusual in that it involved no closures but a mix of rent reductions, waivers and moves from quarterly to monthly payments.
During negotiations landlords at many of Travelodge’s UK hotels, which include some of the UK’s biggest real estate investment trusts, property companies and fund managers such as Secure Income REIT, IM Properties, M&G Real Estate, Abrdn and Legal & General, were aggrieved by a proposed banding of hotels for payment.
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Who do you see as potentially buyers? We don’t think any of the asset-light major chains. Possibly another investor teaming up with one of the major chains. Could it be Choice taking over Wyndham – the franchisor of the US chain of Travelodge’s. Or is it again China calling? Like Jin Jiang, the owner of Louvre Hotels, after Accor Europe’s main player in the economy segment (Campanile, Kyriad, Première Classe). Let us know in the comments.