The Travelodge Owners Action Group, a coalition of landlords of more than 400 Travelodge hotels, has launched AGO Hotels, a platform to allow landlords to exercise their break clause and instead rebrand under Accor's Ibis brand.
The group has set up the option for property owners seeking to exercise their break option from Travelodge following last month's CVA deal. The break option was included in Travelodge's CVA proposals and landlords have until November to explore this option.
AGO Hotels has been structured as a hybrid lease platform, offering a major equity stake, including 25-year leases. Accor has been selected as a preferred brand partner.
The platform has resulted from a request for proposal (RFP) process managed by Viv Watts (managing partner of Oasis Holding) who co-ordinates the Action Group, with hotelier Lionel Benjamin.
Under the AGO Hotels structure, landlords will be offered immediate rent reviews; base rents will be derived directly from Travelodge pre-CVA rents.
Accor will operate as a brand operator (franchisor), with no involvement in the lease or ownership structure, and has agreed to fund the platform to enable properties to rebrand. Should the entirety of the action group opt for the change, Accor will more than double its British and Irish portfolio.
Watts said: "The Travelodge Owners Action Group has engaged multiple leading operators in a request for proposal process, seeking a more equitable structure that would protect the interests of domestic savers and investors.
"As a result of this process, AGO Hotels has been launched as a landlord-friendly platform structured as a partnership between owners, management and brand partners."
He added: "Crucially, property owners are being offered equity ownership in this hybrid lease platform, providing landlord participation in individual hotels as well as portfolio profits.
"The platform has very significant expansion potential and offers the best of both worlds – institutional leases and operational participation.
"By making the owners partners in the business, the AGO Hotels platform is a disruptive business model, protecting the income and values upon which so many individuals, local authorities and charities rely on."
Benjamin said: "With multiple discussions still ongoing, Accor has been selected as a preferred brand partner and has agreed to fund the platform to deliver long-term success.
"With over 100 hotels in the UK and Ireland and a uniquely strong balance sheet, Accor is in an exceptional position to ensure the success of the business for all stakeholders. Accor's brands command a rate premium and provide wider distribution, which will deliver a faster and more efficient return to stability for owners."
Landlords now have the opportunity to discuss the details with Watts and Benjamin, and chairman and chief executive officer of Accor Sébastien Bazin will be hosting an introductory call with the action group next week.