Travelodge targets 220 Local Authorities to help unlock regeneration opportunities to help grow Britain’s cities and towns

London Elephant & Castle Travelodge

Travelodge, one of the UK’s largest hotel brands, which operates nearly 600 hotels, is writing to 220 Local Authorities across Britain proposing a joint development partnership that can act as a catalyst to stimulate regeneration and facilitate further growth.

This letter outlines the pivotal role that Travelodge has been playing for the last 10 years in supporting Local Authorities in England, Wales and Scotland by: 

  • Being a key player in their local regeneration & growth programmes
  • Creating jobs / careers within the local community and helping parents return to work 
  • Attracting new visitors to the area and boosting the local economy 
  • Providing a solid long term income stream for the Local Authority as they have invested in the development of the Travelodge hotel and are the landlord         

The letter also includes a direct call to action on how Travelodge can do the same for other Local Authorities that it does not currently work with – and collectively support Britain’s recovery.    

Travelodge has identified that it can expand its UK hotel network with a further 300 target locations for new hotels across the UK, and is offering Local Authorities the opportunity to have one or multiple hotels within their region to support their regeneration programmes. For over 120 towns, such as Ripon, Lichfield and Cromer, it could be an opportunity to have its first branded hotel – which could revolutionise its local economy.             

This expansion programme could represent an investment of around £3 billion for third party investors and create over 9,000 new jobs across the UK. 

Aylesbury Travelodge

In 2022, Travelodge opened six new hotels, three of which were Local Authority partnerships with two hotels located in London at Docklands and Wimbledon and the third hotel situated in Braintree. The group is also currently on site with construction of two further Travelodge hotels being delivered in direct partnership with Local Authorities in Rotherham and Colchester.  The Rotherham Travelodge is the group’s first hotel in Rotherham and it is also the first branded hotel in the town centre. For Colchester, it is the group’s second Travelodge hotel.    

These bespoke agreements have had unique funding structures, all of which have enabled Local Authorities to utilise their existing assets, create jobs, generate income, and help to regenerate brownfield land in strategically important locations. 

Some of the new Travelodge hotels in this programme have been built on surplus local authority land, with the funding provided either through the Local Authority’s internal resource or via low-cost funding from the Public Works Loan Board or third party resources.

Upon completion of the hotel development, local authorities have the choice of either retaining ownership of the hotel and receiving an annual rent into the Council’s revenue budget or selling the hotel with Travelodge as its operator. 

The two recent London Travelodge hotel openings at Docklands and Wimbledon as well as Colchester were lease-wrapper deals, also known as income-strip deals. Under this structure, the Council takes a headlease, with Travelodge being the undertenant.  The rent that the Council pays is lower than the rent it receives from Travelodge – with an annual profit rent for a 30+ year period.

The Councils’ covenant strength enables the developer to sell the (Council) leasehold investment to an institutional, long-income fund at a much lower investment yield than a lease to Travelodge would achieve. This generates a higher end development value, enabling the development to proceed. 

This kind of structure enables developments to take place which otherwise would not be financially-viable and therefore delivers new town centre regeneration which would not otherwise happen.

Steve Bennett, Travelodge Chief Property & Development Officer said: “In the current climate, Local Authorities are under extreme pressure to invest in their economy and support regeneration projects. This is why we are today writing to 220 Local Authorities to offer our support, as we can make a real difference. We have a proven track record of working with 25 forward-thinking Local Authorities across the UK from Ashford to Stirling. Our effective, innovative co-partnership development deals are spearheading regional economic growth and providing a solid long-term revenue stream.” 

“Britain is now a nation of budget travellers, with more of us choosing to stay in budget hotels than any other hotel type and this trend is set to grow, which is why we are looking to expand our UK hotel network with a further 300 hotels. Adding a Travelodge hotel can be a catalyst to attract new businesses, support regeneration,  bring vacant buildings back into economic use as well as attracting thousands of new overnight visitors to the area and revitalising High Streets.  

In addition, our research shows that, on average, Travelodge customers will spend at least double their room rate with local businesses during their stay; this can be an annual, multi-million pound boost into the local economy.”  

Cllr Chris Read, Rotherham Council’s Leader, said: “The Rotherham Town Centre Masterplan aims to develop Rotherham into a leisure destination which will benefit the local economy and residents. To facilitate this vision, having a well-known and trusted hotel brand like Travelodge is a great asset and hugely beneficial as it helps to attract other major brands to invest in Rotherham.Also Travelodge’s great value proposition will help to attract business and leisure visitors to the area which then positions the town centre as the gateway to explore the wider leisure and culture offer the Rotherham borough.  

Travelodge completes a lease regear with its biggest landlord, LXI REIT

Travelodge has completed a mutually-beneficial lease regear with its largest landlord, LXI REIT for the majority of the properties in the 122 Travelodge hotel portfolio they acquired as part of Secure Income REIT merger in 2022. 

As part of this lease regear, Travelodge has negotiated new caps and collars on rent reviews to limit rental increases during high inflation periods and lease extensions averaging nine years for all 122 hotels. Previously, the rent increases were based on uncapped RPI, but have now been converted to CPI+0.5%, with a cap (maximum uplift) of 4% and a collar (minimum uplift) of 1%.   

The regear also includes rent smoothing across the portfolio, resetting rent levels for the 122 Travelodge hotels to reflect the trading performance of each site.  The total rent across the hotels remains the same, but has been smoothed on a site by site basis, to ensure that each hotel has a robust standalone rent cover. 

Also, new green lease provisions have been added to support Travelodge’s sustainability plan, ‘‘Better Future”. These include:     

  • Sharing of energy, water, recycling and waste data.
  • Co-operating on the environment, social and governance strategies of the landlord and tenant.
  • Future proofing the leases to ensure the landlord has the necessary rights to enter the properties to make environmental performance improvements.    

This lease regear also provides a secure long term, fixed-rate income for LXI REIT and is expected to have a materially-positive impact on their Travelodge hotel asset portfolio and further enhance the investment attraction of these hotels.  

Travelodge 2022 financial results

Travelodge will be officially announcing its full 2022 financial results in early April. This announcement will showcase that 2022 has been a record year for Travelodge, significantly ahead of its previous best year in 2019. 

This performance reflects the strength and resilience of the UK budget hotel market, which performed well in 2022, driven by strong levels of domestic leisure demand and a rapid recovery in ‘blue collar’ business demand, with a more gradual recovery in ‘white collar’ corporate demand. 

UK like-for-like RevPAR growth outperformed the Smith Travel Research (STR) Midscale & Economy benchmark competitive segment, marking the eight consecutive year of Travelodge outperformance. 

Total underlying revenue for the year was up c. 25%, on 2019 levels and Travelodge delivered record profits in the year, with EBITDA (adjusted) expected to be between £210m and £215m (unaudited) (2019: £129.1m, 2021: £81.1m).

Travelodge’s liquidity position remains strong and be-leveraged by £100m in 2022.

The strong leisure and ‘blue collar’ business demand has continued in the first weeks of 2023, as customers continue to prioritise travel and seek out value in tough economic times.  

Travelodge is coming to the Oval cricket ground  

CGI of London Oval Travelodge

To kick-start the development of the new, 95-room Travelodge hotel at The Kia Oval Cricket Ground, a groundbreaking ceremony was held where Steve Bennett, Travelodge Chief Property and Development Officer, and Steve Elworthy, CEO Surrey County Cricket Club, dug the ground to commence the new hotel development. 

Interestingly, the site where the London Oval Cricket Ground Travelodge hotel is being built was previously home to the famous Ovalhouse theatre, which relocated to Brixton in 2020.  

London Oval Cricket Ground Travelodge is the first hotel to be built at the Oval and will feature the group’s new budget-luxe hotel design and on-site restaurant, called the Bar Cafe.  The hotel is located directly opposite the Hobbs Gate entrance at The Kia Oval Cricket Ground and is just 100m from the Oval tube station. 

This development is being developed and funded by Surrey County Cricket Club and construction is being carried out by Bennett Construction. The hotel is expected to open at the end of this year. 

The hotel will be built to a BREEAM excellent standard and achieve an EPC A rating. The design will incorporate air source heat pumps, roof mounted PV’s, an EV car charger and green roofs.   

Steve Bennett and Steve Elworthy

Steve Bennett, Chief Property and Development Officer at Travelodge said:  “We are delighted to be working with Surrey County Cricket Club to open our milestone 600th Travelodge hotel at this iconic location, the Kia Oval. This hotel is going to be a great attraction, not just for cricket fans, but also as a great base for business and leisure travellers looking for a great value stay, with  just a 10-minute tube ride into the West End and The City.”  

Steve Elworthy, CEO of Surrey County Cricket Club, comments: “This is an important step in the development of the area around The Kia Oval and one which will provide benefits to the Club and to the fans travelling to visit the ground from further afield. We are very pleased that the new development will also create new jobs in the community and will be a boost for businesses in the local economy. Travelodge hotels are renowned for their high-quality experience at affordable prices and we’re delighted to be working with such a trusted partner. Their progressive approach to sustainability is also something that is closely aligned to our own goals and ambitions at the Club.”

London Oval Travelodge is being designed to Travelodge’s new budget-luxe premium look specification. This is the group’s most radical transformation to date and this new format has been created on the success of the group’s budget chic hotel format, TravelodgePLUS, with feedback from the company’s largest consumer study – which surveyed around 5,000 UK business and leisure travellers to find the psychographics of the modern budget traveller. 

Key findings revealed that modern travellers crave style, choice and little homely touches to make it easier to work, rest and relax both inside and outside of the room. 

The new Travelodge budget-luxe design includes all the low cost efficiencies you would expect from Travelodge but with the added benefit of thoughtful, stylish design and homely touches throughout its interiors. 

It also features a number of sustainable initiatives, including carpet made from recycled fishing nets and plastic bottles, low energy lighting installed throughout the hotel with motion sensing controls and aerated showers and taps in the en-suite bathrooms.

Travelodge is continuing its budget-luxe hotel upgrade programme in 2023

Budget-luxe room

In 2022, Travelodge completed phase one of the budget-luxe hotel upgrade programme, which resulted in 65 Travelodge hotels across the UK being upgraded to the new, premium, budget-luxe design. This year, the upgrade programme continues with 48 hotels being upgraded to the budget-luxe design.  This represents a multi-million pound investment for the group.   

This hotel upgrade programme is Travelodge’s largest brand transformation to date and the group intends to roll out this new design across its estate in a phased roll-out programme.  

This year, hotels throughout the country will be upgraded to the new budget-luxe design and this includes two London flagship hotels, London Covent Garden and the London Royal Scot Travelodge hotels.  

The new Travelodge budget-luxe design includes a timeless classic, elegant style reception, which is the hub of the hotel. A next generation room has been smartly devised to create a multi-dimensional space, by utilising the new, luxurious signature Travelodge navy blue colour for the R&R (resting and relaxing) section of the room and a serene colour palette for the functional and energising side of the room to work and get ready. Our restaurants, called the Bar Café, have a new contemporary design featuring spaces for guests to work, relax and socialise.  

Budget-luxe reception

The new Travelodge budget-luxe design features a number of sustainable initiatives, including carpet made from recycled fishing nets and plastic bottles, low energy lighting installed throughout the hotel, with motion sensing controls, and aerated showers and taps in the en-suite bathrooms. 

The new Travelodge budget-luxe design features  

A new hub of the hotel – a redesigned elegant reception 

The new reception area has been designed in a warm timeless classic style featuring a decorative panel design, soft low LED lighting, stylish leather bench seating and wooden style flooring. The new colour palette includes the new warm Travelodge signature navy blue shade complemented against a palette of fresh tranquil neutral shades – creating a big warm welcome from Travelodge. 

The next generation multi-dimensional Travelodge room  

The new chic Travelodge room offers everything a business or leisure guest needs for a comfortable, relaxing stay and, most importantly, a good night’s sleep. The room has been smartly decorated to create a multi-dimensional space by utilising the new luxurious signature Travelodge navy blue colour for the R&R (Resting and Relaxing) section of the room and a serene colour palette for the functional and energising side of the room where you need to work and get ready. 

The bespoke, luxurious, king-size Travelodge Dreamer bed remains the king of the room and is dressed with crisp white bed linen, which includes a cosy 10.5 tog duvet and comfy pillows. The bed sits within a light box bed frame that emanates a soft, warm glow to aid relaxation and features bedside reading lights and USB charging points.  Located above the bed is a bespoke piece of artwork commissioned by Travelodge which has been inspired by classic lullabies, with clever use of playful and discoverable elements to help you drift off to sleep.  

The en-suite bathroom also features a new, brilliant white complementary design and décor, with complimentary hand, hair and body wash. 

Other key features of the new room include: 

  • A spacious desk and a stylish desk chair
  • A cosy statement armchair where you can kick back and curl up to read your book or watch TV  
  • Blackout curtains to create a dark space for a good night’s sleep
  • Complimentary tea & coffee making facilities 
  • A TV with Freeview 
  • LED lighting in the room and bathroom 
  • Complimentary WIFI for 30 mins, £3 for 24 hours                             

A stylish on-site restaurant with a statement bar called the ‘Bar Café’  

The stylish Bar Café features a well-designed space for guests to work, relax and socialise. The restaurant features a contemporary design, with key statement features and a warm relaxing ambiance.  The restaurant offers distinctive zones designed to suit the needs of business and leisure travellers. These include counter seating with built-in USB and laptop power for those working outside the room, dining zones with intimate booths and dining benches for groups.  Situated in the heart of the Bar Café is a stylish statement bar which offers a selection of wines, popular spirits and a range of ales.