January 2024 - Travelodge Property Development

Travelodge appoints new UK Head of Estates

Travelodge, the UK’s first budget hotel brand which operates nearly 600 hotels across the UK, Ireland and Spain, today announces it has promoted and appointed Kirsty Berry as the Company’s new Head of Estates.

Kirsty joined Travelodge in 2022 as Regional Estates Manager and has been an integral member of the UK Estates team since. With a background consisting of a vast range of property experience with a number of multi-site businesses including Domino’s UK and Majestic Wines, Kirsty has been crucially involved in various sublet deals and lease regears. This includes leading a unique sublet agreement for one of the UK’s first Popeyes Louisiana Chicken drive-thrus, at the Travelodge Northampton Way site, which the Group announced last year.

Over the past year, a key strategic priority for the Property and Development function of the Travelodge business has been expanding the Estates team and its remit, due to the Company’s growing hotel portfolio and opportunities to improve its assets. The team is dedicated to supporting the hotels and the wider business with general estate matters and is also responsible for asset management, rent reviews, service charges, business rates, sublets, insurance, asset management, lease renewals and landlord approvals.

Members of the Estates team are field-based so that they can make regular hotel visits, allowing full access to the Travelodge hotel portfolio and providing hands-on support for Travelodge’s hotel colleagues and its landlords.

Reporting into the Chief Property and Development Officer, Kirsty will be overseeing all operations of the Estates function, made up of six team members, and is currently looking to expand the team further by the appointment of a Regional Estates Manager (South). For more details of this vacancy, please visit: https://www.travelodge.co.uk/careers/

Steve Bennett, Chief Property and Development Officer, Travelodge, comments: “We are delighted to be promoting Kirsty to the position of Head of Estates, as she has proven to be integral to the recent success of the Estates function. Kirsty’s industry expertise and experience represents a significant benefit to Travelodge as a business, and she has already played a crucial role in the growing and improving Estates Management teamsince joining in 2022.”

Travelodge has a significant estate of nearly 600 hotels across the UK, Ireland and Spain, with over 580 of these hotels located throughout the UK. In addition, the group has a large sublet estate, with over 150 subtenants. Furthermore, with over 200 Bar Cafes, Travelodge is also one of the largest Food & Beverage operators in the country.

Travelodge agrees to acquire 66 Travelodge-branded hotels from its largest landlord

The 66 hotels will be acquired on a freehold and long leasehold basis enabling the Travelodge group to take control of the assets, enhancing value
The assets will be acquired through a newly created property holding group, under a new Travelodge group holding company, benefitting from support to drive further growth from its owner, GoldenTree Asset Management (GTAM)
The hotels cover a wide geography, including London, the Midlands and the North of England across City Centre and roadside locations
The transaction comes after Travelodge reported record-breaking Q3 results in November, with revenue up 16.7% to £782.0 million and underlying earnings (adjusted EBITDA) up 22.4% to £201.2 million
Travelodge looks forward to continuing to work with LXi, with whom it has enjoyed a strong working relationship over many years, and who remain its largest landlord
The Travelodge group plans to explore further freehold opportunities, which would further diversify Travelodge’s freehold/leasehold asset base

8 January 2024 – Travelodge, the UK’s first budget hotel brand which operates nearly 600 hotels, today announces that it has exchanged contracts to acquire 66 Travelodge-branded hotels on a freehold and long leasehold basis from its largest landlord, LXi REIT plc (“LXi”), for a combined sum of £210 million.

The acquired portfolio includes hotels in London, regional City Centres (Birmingham, Bath, Leeds, Liverpool), and roadside locations.

Travelodge operates a well-diversified, high-quality network of hotels located in major cities and towns across the UK. The business is well underway with its hotel refit programme – its most significant brand transformation to date – with plans to accelerate this investment and upgrade approximately 50% of the room estate by the end of 2024. The programme includes a new hotel design featuring a new style reception area, next-generation rooms with bedside charging ports and blackout curtains and upgraded bar cafes.

Jo Boydell, Travelodge Chief Executive of Travelodge, said: “The acquisition of 66 Travelodge hotels from LXi REIT, with support from our owner GoldenTree Asset Management, will mark a positive step for Travelodge as we seek to optimise our hotel portfolio and diversify our freehold/leasehold split to enhance value. The new structure will provide us with a platform to explore further freehold acquisitions. We have nearly four decades of expertise in operating budget hotels and we look forward to continuing to invest in our hotel network to drive growth.

We are pleased to announce this transaction with LXi, with whom we have enjoyed a strong working relationship over many years. We look forward to continuing to work with LXi, who remain our largest landlord, with the 69 Travelodge hotels they continue to own.”

Simon Lee, CEO of LXI REIT Advisors, said: “We are delighted to be transacting with Travelodge on this landmark sale of 66 hotels for £210 million, which is in line with the latest book value. Most of the sale proceeds will be used to pay down debt, reducing Group LTV to 34%, and Travelodge’s proportion of Group rent will reduce to 11%. The sale and debt repayment are not expected to have a material impact on the Company’s earnings.

Travelodge operate a best-in-class hotels business and the firm commitment of its owners to the business is demonstrated by their support to enable the purchase of 66 of its assets.”

The transaction comes after Travelodge reported record-breaking Q3 financial results in November 2023, with double digit revenue growth of 16.7% to £782 million and underlying earnings (adjusted EBITDA) up 22.4% to £201.2 million. This strong performance reflects continued demand from Travelodge’s diverse range of leisure and business customers who seek affordable, quality accommodation.

Travelodge continues to see significant growth opportunities in the UK, with over 300 target locations identified following a comprehensive review of gaps in the market. Additionally, the company will continue to review extension opportunities across its existing estate. The business has also established a profitable market presence in Spain, operating six hotels including its third in Madrid which opened last year, and has identified a further 20 target locations across the country.

The transaction is expected to complete on 28 February 2024. The purchase price for the transaction is expected to be funded through a combination of a further shareholder investment from GTAM, the proceeds of a third party financing facility secured on the assets acquired in the transaction, and approximately £35 million of cash from Travelodge. The newly created property holding group that will acquire the assets will be held by a newly formed parent company of Thame and London Limited and will not guarantee or be subject to the covenants under the existing Travelodge senior secured notes due 2028.

This announcement contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as “forward-looking statements”. A number of risks and uncertainties could cause our actual results to differ materially from current projections, forecasts, estimates and expectations relating to us. In particular, the property purchase transaction may not be completed on the terms described herein, or at all. Our forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors, many of which are beyond our control. Any or all of these forward-looking statements may turn out to be incorrect.

Travelodge continues to evolve multi-million pound refit programme by completed the upgrade of 60 hotels in 2023

Travelodge has announced that the group completed the refit of a further 60 hotels as part of its multi-million pound refit upgrade programme in 2023. This is the group’s most radical transformation to date and is continuing to evolve at pace. This investment in the group’s core product is delivering positive commercial and customer benefits, with hotels in popular business and leisure destinations across the UK having been upgraded to a new, premium design.

The new hotels that have been refitted last year include two of the largest hotels on the Travelodge estate – 463-bedroom London Central Covent Garden Travelodge and 408-bedroom London Kings Cross Royal Scot Travelodge.

The new design that is being rolled out across hotels was created with both business and leisure travellers in mind. The key findings following Travelodge’s large-scale consumer study, which surveyed over 5,000 business and leisure travellers, revealed that the modern traveller craves style, choice, and comfort. They want to have the opportunity to relax both inside and outside of their room.

With this in mind, the new design incorporates these elements. The full list of design features can be found below.

The upgrade also boasts a number of sustainable initiatives including low energy lighting in hotels.

Travelodge has worked closely with contractors Willmott Dixon Interiors, IH Group and Troy Group to carry out works across all the hotels. The programme will continue into 2024, with 50% of Travelodge rooms set to be upgraded by the end of the year.

The new Travelodge premium look and feel 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 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.

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