US-based GoldenTree Asset Management has put Travelodge up for sale for £1.2 billion.
The firm has held meetings with investment banks to explore a potential sale of the 595-hotel budget chain, following a surge in demand post-pandemic, according to reports in The Sunday Times.
This development comes after Travelodge’s two other backers, Avenue Capital and Goldman Sachs, sold their stakes in the business to GoldenTree. In March, the chain said it wanted to enter into joint development partnerships with local authorities across Britain in order to open 300 hotels.
This isn’t the first time a sale has been considered. In 2015, the owners of Travelodge hired bankers to explore a potential sale or flotation of the business. However, a deal was decided against.
For 2022, Travelodge posted sales of £900 million and profits of £12.9 million, up more than a quarter compared to pre-pandemic levels, with room occupancy also coming in higher than in 2019 and ADR at £64.31.
Why it matters
Budget hotels in the UK are currently enjoying a period of boom as post-pandemic wanderlust and a cost of living crisis collide to increase the demand of staycations and budget hotels. Earlier this year, STR, a division of CoStar Group, noted that the increased focus on value for money bodes well for budget hotels as it predicted a “positive” and “strong” 2023 for the likes of Premier Inn and Travelodge, following on from out performance in the second half of 2022.