Overall ranking: 61 (new entry)
Hotelier ranking: 10 (new entry)
The one-time boss of InterContinental Hotels Group (IHG) in Asia-Pacific, Peter Gowers was appointed to head up Travelodge as chief executive in 2013, replacing industry stalwart Grant Hearn.
Launched in 1985, Travelodge was the UK’s first budget hotel chain and today is the country’s second-largest brand after Premier Inn, with 560 hotels across the UK, Ireland and Spain.
A law graduate from the University of Oxford’s Keble College, Gowers joined Travelodge from Safestore Holdings, the UK’s largest self-storage operator, where he was chief executive. He had taken a break from the hotel sector for two years following his departure in 2011 from IHG, where he oversaw more than 250 hotels with more than $1.5b (£1.04b) in annual hotel turnover and 60,000 hotel employees.
From 2005 to 2007, Gowers led IHG’s worldwide marketing and sales team as chief marketing officer, during which time he led the global rebranding of InterContinental, Holiday Inn and Holiday Inn Express. He spent his early career at Bass, the former parent company of IHG, and with an international management consultancy specialising in corporate finance, media and telecoms.
What we think
Gowers has steered Travelodge into calmer waters having taken the helm just a year after it had been on the brink of collapse, with a debt of £635m. He came into the business soon after Travelodge was acquired from Dubai International Capital by American hedge funds Avenue Capital and GoldenTree Asset Management in partnership with US bank Goldman Sachs.
The trio of businesses secured the future of Travelodge by initiating a debt-for-equity swap and Company Voluntary Arrangement (CVA), which involved the shedding of 49 hotels no longer considered viable.
Under Gowers’ leadership, Travelodge has improved the quality of its offer with a £100m modernisation programme, featuring the brand’s collateral, a king-size Dreamer bed in every bedroom, and Lavazza premium coffee on its unlimited breakfast menu.
In 2017, the company announced that an additional £5m was being spent on launching a “premium economy”-style bedroom for guests looking for additional comforts. Featuring a calmer colour palette of blue, beige and taupe, the rooms also offer multiple power and USB charging points, a Lavazza A Modo Mio capsule coffee machines, Hansgrohe Raindance three-jet adjustable showers and Samsung Slimline flat-screen TVs. To date, 1,000 SuperRooms have been launched, with a further 400 expected to come online this year.
Gowers believes there is a long way to go in driving up the capacity of budget rooms across the UK, saying there is an insatiable demand for good quality, keenly priced accommodation, as highlighted in the most recently published financial results of parent company Thame and London.
Having returned to the black in 2015, total revenue in 2016 increased 6.8% to £597.8m with EBITDA up 4.7% to £110.1m and revenue per available room growth of 2.5% to £39.34.
A predominately leasehold business (representing 98% of total revenue), Travelodge is working hard at finding new sites and in doing so is partnering with local authorities to develop hotels within wider regeneration projects. The company has contacted 210 local authorities to suggest the building of hotels on surplus land, with the council retaining ownership and receiving an annual rent once built or selling the hotel with Travelodge as the operator. To date, seven local authority partnership deals in Aylesbury, Bicester, Dudley, Eastleigh, Redhill, Telford (opening 2018) and Thetford have been completed.
Gowers believes there is the potential to grow Travelodge by an additional 250 hotels, with an average of 20 properties joining the portfolio per annum in coming years. This year will see the launch of the brand’s largest property to date, the 395-bedroom flagship hotel in Middlesex Street in the City of London.
Ongoing improvements in financial results, together with the increased investment in and expansion of the business, will no doubt make Travelodge an attractive proposition to potential buyers. Gowers confirmed in 2015 that the current owners were looking to exit from the business, with a figure of £1b being touted for the portfolio.
Travelodge sees 7% revenue increase following launch of SuperRooms >>