UK hotel chain Travelodge has begun a spree of hotel openings costing £140 million. The chain will open 19 new branches in total this year, as there are rumours that several equity firms are looking to purchase it.
The first opening will be in Weston Super Mare this Spring. It comes as Travelodge was saved from the edge of collapsing back in 2012 by Goldman Sachs as well as two hedge funds based in the USA.
Since the bank happened, the hotel chain, which is the third largest in the UK, has returned to producing profit. The buyers took over the chain from Dubai International Capital in a debt for equity swap. However, the USA owners are now looking to sell their shares. It is said that the private equity firm Advent International, who recently sold the Priory group of mental health hospitals, is amongst several groups which are interested in purchasing the chain.
Before it was rescued by Goldman Sachs, the company had been forced to take an emergency loan from its lenders in order to keep paying interest on its £1 billion debts. Since then, Travelodge has spent over £100 million modernising 92 per cent of its rooms, overhauling them with contemporary designs and adding king size beds. This was the work of a new Chief Executive who was hired back in 2013 to help steer the company’s turnaround.
The company said that underlying profits increased by over 60% for the year to December 2014. The average rate for rooms increased to £48.19 between January and July 2015.
The new hotel openings will create 450 jobs and will bring the overall number of hotels to 54, bringing the company closer to it’s rival Premier Inn’s network of over 700 hotels.
Further openings scheduled to take place this year are Raynes Park, Finchley and Finsbury Park in London, as well as new locations in Andover, Bicester, East Grinstead, Kings Lynn, Stirling and Glasgow.
The hotels Chief Executive said that the drive to improve modernisation had raised levels of quality through the hotel’s network. He said that the company is also looking to open in a further 250 locations across the country, with the 19 new hotels marking an important step in delivering better quality for customers.
He added that the hotel market in a wider context is continuing to improve from ‘strength to strength’ as a result of businesses becoming more cost conscious and a growth in the amount of travellers planning their trips away independently rather than going to a travel agent.
