Last month we ran a long piece about the troubles at Travelodge.
You can read our story about the Travelodge rebranding and financial crisis here. To summarise, the (hedge fund) owners of Travelodge had put the business through a Company Voluntary Arrangement to allow it to restructure its debts. The complex way that CVAs are structured meant that the landlords of the hotels could not block it even though their rent was being cut without their consent.
The landlords did, however, force a break clause into their lease contracts. The owners of 400 hotels formed the Travelodge Owners Action Group in an attempt to negotiate a bulk move to a new group.
According to The Caterer, Accor has been selected as their preferred partner going forward. If a deal can be finalised, the 400 hotels will rebrand under Accor’s budget Ibis brand. Accor will pay the costs of rebranding, whilst a new operating company – jointly owned by the hotel owners – will take over the hotel leases. Landlords will be guaranteed, at a minimum, the rent they were receiving from Travelodge prior to the CVA taking place, as well as a share of the profits. Other non-Travelodge hotel owners will be able to become part of the operating company if they wish.
Separately, The Times reported that the owners of 80 Travelodge hotels who are not part of the Travelodge Owners Action Group are planning to start a new brand called Goodnight Hotels.
If both of these moves comes to fruition, Travelodge will be left with under 100 UK hotels. The owners may decide to throw in the towel at this stage, potentially pushing the rump into receivership.
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