Travelodge to acquire 66 hotels in £210m deal

Travelodge is to acquire 66 hotels from its largest landlord for £210m as it eyes further expansion across the UK.

The budget group, which operates nearly 600 hotels and employs over 12,000 people, has exchanged contracts on a freehold and long leasehold basis from LXi REIT plc.

The portfolio includes Travelodge-branded hotels in London, regional city centres across Birmingham, Bath, Leeds and Liverpool, and roadside locations.

Travelodge has paid £35m towards the deal with extra funding contributed by its owner, GoldenTree Asset Management.

Jo Boydell, chief executive of Travelodge, said the deal was a "positive step" for the group as it looked to optimise its portfolio.

"The new structure will provide us with a platform to explore further freehold acquisitions," she added.

"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."

Travelodge is targeting further expansion in the UK with more than 300 locations identified following a review of the market.

It is in the midst of a refurbishment programme with plans to upgrade around half of its room estate by the end of the year with new features including bedside charging ports and blackout curtains.

Travelodge reported a strong performance in its Q3 financial results, with revenue rising 16.7% to £782m and underlying earnings up 22.4% at £201.2m.

The company, founded in 1985, also operates nine hotels across Ireland and six in Spain.

It opened a third hotel in Madrid last year and has identified a further 20 target locations across Spain.

LXi REIT remains Travelodge's largest landlord and continues to own 69 Travelodge-branded hotels.

The transaction is expected to complete on 28 February 2024.