Owners seek £1bn for Travelodge sale

Daily Telegraph says that Deutsche Bank has been appointed to advise the hotel group.

The chain’s current owners Goldman Sachs, Avenue Capital and GoldenTree Asset Management took control in 2012 after Travelodge faced the threat of collapse under a £500 million debt mountain.

An initial public offering is believed to be less likely than a sale, and there is speculation that Travelodge could draw the attention of an Asian suitor, The Telegraph reported.

‘Britain continues to be a nation of value seekers and the value hotel market continues to be the fastest growing part of the United Kingdom hotel industry, ‘ said chief executive Peter Gowers, pictured here with what MT can only presume is the rest of the board.

In 2014, the chain even launched its first television advert campaign in more than four years.

He added: “Our shareholders are not natural long-term holders of a hotel business and they are working with Deutsche Bank to explore their options for the future”.

Since 2013 the company has embarked on a £100m investment programme.

This investment looks to have been successful with revenue up 17.9% to £261m in the first half of the year. Travelodge can get away with charging more thanks to a revamp that included the “modernisation” of 92% of its rooms.

Travelodge hopes to open 45 new hotels over 24 months.

The firm said during the period it opened five hotels, bringing the estate up to 519 hotels, or 38,665 rooms, in the United Kingdom, Spain and Ireland.

Commenting on how the business might be impacted by the introduction of the new national living wage, Mr Gowers said: “In the short-term it’s clearly a cost-hit but in the long term it’s not a significant issue”.