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Travelodge landlords 'threaten to block rent cuts and establish new operator'

01 June 2020 by
Travelodge landlords 'threaten to block rent cuts and establish new operator'

A group of Travelodge landlords has reportedly threatened to block rent cut negotiations and establish a new hotel operator.

The Travelodge Owners Action group, which is said to represent the landlords of more than 400 of the group's 580 hotels, has told The Telegraph its members could evict the budget hotel group and form a new operator.

The group's leader Viv Watts told the national newspaper: "Travelodge does not own its hotels, so they are reliant on other landlords to invest in the real estate. We have more than £100m in commitments from other private investors to create a Travelodge 2.0., which would give landlords a stake in the company."

It is not the first time Travelodge has faced threats from landlords since pursuing renegotiations in light of the coronavirus crisis.

Combined Property Control Group (CPCG) had threatened legal action, arguing the group is receiving government support and should not be penalising landlords, The Sunday Times reported last week.

The move came after Travelodge had written to landlords warning that the group will be forced to pursue a company voluntary agreement (CVA) if an agreement over rent could not be reached. In the letter, seen by The Caterer, the group's proposals include rent cuts of up to 63%, with a return to full rent by the end of 2021, and the offer of lease extensions.

Travelodge, which employs around 10,000 people, estimates that the combination of hotel closures, sites unable to reopen until 4 July at the earliest and a predicted slow recovery will mean more than £350m in lost revenues for the business – the equivalent of 18 months' rent.

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