Today, Travelodge, the UK’s fastest growing hotel company, has announced that, following a successful 2011 for both the business and its property acquisition team, it has added 146 new UK locations to its target requirements list.
This reflects the continued strong trading of the company, which, despite the current liquidity problems in the funding market, is enabling development finance to be secured for its new hotels.
The decision by the Travelodge Board to expand its location list was also taken in response to the continued availability of sites that previously would have been sold for prime residential or commercial use.
The ability of Travelodge to capitalise on the opportunities provided by its own strong trading position and the continued weakness in the property markets is greatly helped by its flexible development model. Earlier this year, Travelodge announced its ‘Metrolodge’ strategy, which will see it taking smaller properties in sought after locations and office buildings across the UK.
It has also successfully secured development sites by working together with companies such as: supermarket brands - Morrisons, Waitrose and Tesco. Pub companies such as Mitchells & Butlers, JD Wetherspoons, Greene King and other brands which includes: , Top Shop, Kentucky Fried Chicken, , Wilkinson Stores and Toyota.
This means that both out of town and city centre locations are becoming more viable and enable Travelodge to review locations that previously would not have been affordable for hotel development.
Notably, of the 146 locations, 65 of them are located within the Greater London area. This reflects the demand for affordable hotel rooms not just in prime central areas such as Liverpool Street, Covent Garden, Old Street and Tower Hill but London suburbs such as Hornchurch, Ruislip and Morden. Travelodge is already the largest hotel brand in the Capital with 43 hotels and 5,958 rooms.
In addition to the focus on London, the new target list also supports the growing Staycation trend and four new locations have been added in the Lake District as well coastal destinations such as Hove, Peterhead and Newhaven.
Tourist and event hotspots have also been reviewed and the following locations have been added to the list: Edinburgh Zoo, Liverpool Aintree and the Glasgow SECC.
Guy Parsons, Travelodge, Chief Executive said: “Unlike other hotel companies we took the decision to continue expanding during the recession and we have reaped the benefits of doing this. This year, we have opened new Travelodge’s in the heart of Birmingham, Bristol, Canterbury, Cardiff, Hull, High Wycombe, Lancaster, Manchester, the City of London and the West End. We will also shortly be opening new hotels in the centre of Bradford, Edinburgh, Ipswich and Liverpool that prior to the start of the downturn would not have been viable for us to pursue.
“Our ability to raise finance means that we are able to move quickly when other companies remain strangled by red tape. This, coupled with our ability to be flexible and innovative in terms of the development schemes we can undertake, ensures we are in a very strong position. The expansion of our target list reflects the confidence I have in the ability of our property team to move quickly and secure the best sites.”
“Greater London is a big focus for us. Outside of Central London, many of the London Boroughs have almost no supply of good quality, branded hotel accommodation, despite major population centres, good local business drivers and easy access into the West End and City. To help meet this demand, we have opened new Travelodge’s this year in Cricklewood, Ealing, Edmonton and will be opening next to Twickenham train station this week. All are trading very strongly. Next year we will open twelve more Greater London Travelodge’s, seven of which will open before the Olympics. These will further strengthen our position as the biggest hotel brand in London.”
As well as announcing the expansion of the target location list, Travelodge has also confirmed that in 2011 it has exchanged contracts for 44 further new hotels (approx. 4,000 bedrooms and 1.2m sq ft). These have a combined construction value of £163 million and an investment value of £228 million. When open, 845 jobs will have been created, with all the entry-level roles going to the local long-term unemployed thanks to Travelodge’s nationwide partnership with Job Centre Plus. Five of the hotels are already trading, with the rest scheduled to open in 2012 and 2013.
In addition to the exchanges, Travelodge has opened 38 new hotels in 2011, increasing its UK estate to 496 hotels.
Guy Parsons continued: “Our ability to secure 44 new deals in 2011, despite the difficult conditions, shows how strong the Travelodge development model and covenant is. We are flexible and willing to work with a wide variety of partners, ensuring that the developers who fund the construction of our hotels can move quickly and secure finance from a number of different sources.”
Unique amongst hotel companies, Travelodge’s flexibility means that it can work with a variety of partners to ensure schemes can be delivered through securing finance. Examples from this year include:
• King’s Lynn - Greene King will be opening a Hungry Horse pub alongside a 68- room Travelodge hotel.
• London Enfield - After Holiday Inn Express pulled out due to a difficulty in raising finance, Travelodge moved quickly to secure a 132-room hotel on the Lumina Park development. Located on the A10, Travelodge will be on site with Toyota and Big Yellow Self Storage.
• Aylesbury Theatre Plaza - Travelodge will be opening an 81-room hotel alongside a Waitrose supermarket. Aylesbury & Vale Council is the developer.
• Stevenage - Alongside an M&B Miller and Carter Pub, Travelodge will be opening a 71-room hotel.
Guy Parsons concluded: "Teaming up with other major retailers means that prime locations which might not be affordable for either party individually, become available. Where they take standard retail leases on institutional terms, like we do, the combined development becomes an attractive investment proposition and many of the UK’s major pension funds, such as Aviva, Legal & General, PRUPIM and Scottish Widows have invested directly in the Travelodge covenant this year.”