Travelodge landlords mull move to serviced apartments
UP TO 40 Travelodges could shut as landlords plot to replace them with a serviced apartment firm after being forced to accept rent cuts.
The sites’ owners are in talks with room2, part of family-owned property firm Lamington Group, which is seeking to launch a low-cost version of its
“hometel” concept that combines serviced apartments with some add-ons.
Discussions began after a bitter row between Travelodge and landlords, which culminated in a restructuring agreed last month.
The company’s voluntary arrangement forced some landlords to accept steep rent cuts until 2021. However, property owners can break their leases and walk away from Travelodge as part of the agreement.
Robert Godwin, the room2 founder, said his business had remained in the black throughout the Covid-19 crisis, with occupancy rates of more than 50pc.
Mr Godwin says he hopes that his “room2 lite” concept will appeal to business customers as restrictions are lifted. This, in turn, should support landlords seeking longer-term certainty over rent collection.
He said room2 was proposing to run new sites on a turnover rent basis, where landlords’ earnings depend on the occupier’s revenues. The operator is in talks with the owners of up to 40 Travelodge premises.
He said: “Our hometel model has held up extremely well in recent months and proved its resilience, despite the worst of economic cases.
“We see an opportunity to replicate this success in the budget hotel market, setting a new consumer standard, while offering landlords a leasing model which aligns their interests with ours and is resilient enough to drive sustainable returns over the long term.”