AGO Hotels has announced that it has secured at least nine hotel leases from Travelodge.
Travelodge's acrimonious company voluntary arrangement (CVA) earlier this year included a break clause allowing landlords to terminate leases and re-let the hotels without penalty before the end of the year.
Two new platforms, AGO Hotels and Goodnight Hotels, were launched to tempt disgruntled landlords into exercising their break clause and rebrand. Landlord Secure Income REIT cast a vote of confidence in the group last month, announcing it would be sticking with the leases of its 123 Travelodge hotels. However, just last week Premier Inn owner Whitbread confirmed it had snapped up two Travelodge hotels.
AGO Hotels was launched in partnership with Accor to rebrand properties under Accor's Ibis budget brand, with AGO funding the rebrand costs and Accor the operator. AGO Hotels was co-founded by Travelodge Owners Action Group leader and Oasis Holding director Viv Watts and hotelier Lionel Benjamin.
The AGO Hotels platform offers a 25-year FRI lease, an equity stake and profit participation calculated on the basis of each hotel's earnings before interest, tax, depreciation and amortisation (EBITDA).
AGO Hotels said: "The first nine hotels to switch to the AGO Hotels platform is a real milestone, marking the culmination of a long journey to provide landlords with an alternative lease structure to safeguard their interests and the value of their investments.
"The platform has very significant expansion potential by offering the best of both worlds – institutional leases and operational participation.
"AGO Hotels is in discussions with owners of individual hotels and portfolios who stand to benefit from our disruptive business model, enjoying downside protection and upside participation.
Philip Lassman, vice-president development, Accor Northern Europe, said: "Accor is pleased to be a founding partner of AGO Hotels which has now secured nine new hotel sites. AGO is an innovative model for the UK with strong potential for the ibis budget brand."
Founded in 1985, Travelodge is the second largest hotel brand in the UK, based on number of hotels and rooms operated, below Whitbread's Premier Inn brand. Travelodge leases, franchises, manages and owns around 591 hotels, mostly in the UK but also in Ireland and Spain, and is owned by funds managed by GoldenTree Asset Management, Goldman Sachs Group and Avenue Capital Group.