Travelodge Development & Funding

During the last 5 years, we have opened over 80 new Travelodges throughout Great Britain

New Travelodge Development Opportunities

Welcome to the new openings and development section of our website and thank you for taking interest in our mission to develop hundreds more Travelodge hotels across the UK, Ireland and Spain. During the last 5 years, we have opened over 80 new Travelodges throughout Great Britain, in locations including Bath, Birmingham, Bristol, Chester, Edinburgh, Glasgow, Leicester, Lincoln, Liverpool, Milton Keynes, Newcastle, Portsmouth, St Albans, The City of London and York.

Tony O’Brien at official opening of Chester Central Bridge Street Travelodge

We are currently seeking development opportunities that could incorporate a new Travelodge hotel, either on its own or as part of a mixed-use scheme, and will consider new developments and conversions of existing buildings and hotels operated by other brands.

In 2021, we will be opening around 17 new hotels, in locations including Bristol, Kendal, Leicester, London, Mansfield, Poole, Rochdale, Sandwich, St Albans and Witney and are looking to open a similar number each year.

If you have details of a site or hotel that is available and could be redeveloped as a Travelodge then please contact our Development Manager responsible for the region where the property is located. Our interactive map below highlights our target requirements and provides contact details for our Development Managers. However, this list is not exhaustive and the DM’s will be delighted to consider any opportunities within their areas. 

You can make a site introduction either by contacting the relevant Development Manager directly.

Thank you again for taking interest in our hotel development programme.

Tony O’Brien

UK Development Director

UK Targets Map

UK Development Model

Travelodge is an operational business, whose expertise is in providing a great night’s sleep, at quality, comfortable and affordable hotels, in great locations. To focus on this, we follow a leasehold business model, taking institutionally-acceptable, FRI, 25-year lease terms, with 5-yearly rent reviews in line with the CPI index, collared and capped at 1% & 4%. This allows maximum flexibility, enabling Travelodge to form part of mixed-use developments, open in the best locations and to add value to the overall investment package.

We enter into Agreements for Lease and Leases with developers, conditional on receipt of planning permission and have standard contracts drawn on fair, institutionally-acceptable terms.

Our developers build the new Travelodge hotels to a full turnkey specification, in accordance with our Tenant’s Requirement Document appended to the Agreement for Lease. The new lease is then entered into upon practical completion, with the new hotel usually then opening for trade within 7 days of PC.

The Travelodge standard Lease of Whole (to be used where Travelodge occupies a standalone development) and the Travelodge standard Lease of Part (where we share a building with other occupiers) have deliberately been drafted to represent a fair balance between the requirements of both the Landlord and Travelodge and to be “institutionally-acceptable.” With long lease terms, no breaks and inflation-linked rent reviews, these provide good, long-term income investments and are therefore attractive to many investors. Further details of Travelodge lease investment and funding opportunities are outlined below.

Travelodge developments are carried out by a wide range of development companies, from major prop co’s to one-man-band developers. Recent projects have been completed by Aberdeen Standard, Associated British Foods Pension Fund, Aviva, Canal & River Trust Investments, Intu, Land Securities, LaSalle Investment Management, Legal & General, Lidl, Milton Keynes Parks Trust, Nuveen, Orchard Street IM, Peel, Principality Building Society, Reef Estates, Savills Investment Management, SEGRO, Stanhope and The Mall.

We have also opened a significant number of new hotels in partnership with Local Authorities, as part of Council-led developments, including Aylesbury Vale District Council, Barking & Dagenham Council, Breckland District Council, Cherwell District Council, City of Edinburgh Borough Council, City of Lincoln Council, Denbighshire County Council and Reigate & Banstead Borough Council.

Although most of Travelodge’s new hotels are developer-led, we do undertake some developments ourselves, forward funded by funding partners. This allows us to also consider some freehold site purchases.

The links below will provide you with more details regarding the different kinds of deals that we agree and our Development Managers will be able to supply any additional information that you need regarding our development model or standard legal agreements.

Development Types

Standalone, new build projects

Travelodge leases of whole

Mixed-use schemes

Travelodges forming part of wider developments, above or alongside other uses (including retail, food & beverage, drive-thru, residential and offices)

Building conversions

Conversions of all or part of former offices, high street retail and other buildings to new Travelodge

Conversions of going concerns operated by another brand

Conversions of other operators’ hotels to new Travelodges

Forward-funded, self-build transactions

Freehoold aquisitions developed by Travelodge and forward funded by an end investor

Council partnership deals

Council-led developments, projects built on behalf of Councils and Council lease-wrapper deals

Funding Opportunities

Travelodges leases institutionally-acceptable, for lease terms of 25+ years, with no breaks, structured with an initial annual rent that is reviewed upwards-only every 5 years, in line with inflation (CPI, collared and capped). This provides a longer lease length than is available in most other sectors of the UK property market, combined with a greater level of security than that offered by a management contract or turnover lease structure, which is utilised by many other hotel operators.

This lease structure and Travelodge Hotels Limited’s good covenant provides an attractive investment product, which continues to receive high levels of demand from a range of investors, including UK pension funds, various international investors, syndicated investors, family trusts and high net worth individuals.

Since 2010, over £750m has been invested directly in the Travelodge covenant by the UK’s major pension funds, including the Associated British Food Pension Fund, Aviva, AXA, Blackrock, BP Pension Fund, CBREGi, Charities Property Fund, Chubb Pension Fund, Derbyshire CC Pension Fund, Diageo, Henderson Global Investors, Lancashire Council Pension Fund, Leicestershire CC Pension Fund, Legal & General, Orchard Street IM, PRUPIM, Scottish Widows, Smiths Industries Pension Fund, Staffordshire CC Pension Fund and Standard Life.

Many of Travelodge’s developers are traders rather than investors and so forward commitment or forward funded opportunities are regularly available.

Forward funded deals are advantageous to investors, as they offer significant SDLT savings and can enable investors to benefit from Capital Allowances, both of which can significantly improve the running investment yield generated by the end investment.

Furthermore, the specification of our new hotels is better than our older hotels, because of Building Regulation and other Statutory requirements and as our new hotels are built in accordance with our latest brand standards, which include comfort cooling, new LED lighting, acoustic door sets and our latest decor and room types, including SuperRooms and, in some cases, full Travelodge Plus specification.

For all of these reasons, new Travelodge developments represent optimal investment opportunities.

As we open a wide range of different kinds of hotel developments (standalone, mixed-use, large and small hotels, in many different parts of the country), there is a large variety of different investment opportunities available, with lot sizes generally ranging from around £5m to £15m, though, occasionally, over £30m. London and Major Market hotels tend to be most popular investments and therefore have the lowest investment yields. However, that obviously provides some excellent buying opportunities in some of the smaller Provincial markets, with more advantageous yields for locations from which Travelodge often trades extremely profitably, given the lower rental levels and lack of competition in these areas.

Some investors prefer standalone Travelodge developments, whilst others would rather invest in well-let mixed-use schemes.

Whatever your investment appetite, there is likely to be a Travelodge investment opportunity that will meet your criteria.

To discuss any funding opportunities, the please contact our UK Development Director, Tony O’Brien, on 07785 115 628.

For many years, Travelodge has been tracking and recording all investment purchases of branded budget hotels and, where appropriate, are willing to share this information. You may request a copy from us by contacting us.

Financial Information

All of our leases are taken in the name of Travelodge Hotels Limited, which is Travelodge’s operational business.

A Group Overview and copies of our Noteholder Presentations, Financial Reports and Investor Press Releases can be accessed via the below link.

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