August, the month of holidays, was anything but in the shadowland created for us all by the pandemic; part work, part play, lines of demarcation missing in action. But, as governments across Europe encouraged their citizens to take a break - but stay at home - the hotel sector wound itself up to look more like a September in its enthusiasm for deals and derring do.
The story of the summer was Travelodge and the potential ramifications for stakeholder alignment meant that it attracted viewers from all over the world. It started innocently enough, with rumblings of a CVA at the group, which had many muttering ‘so far, so Travelodge’. Protected by Covid-19 legislation in the UK, the brand’s owners were able to push through a plan to cut rents, which caused an uprising and banding together of hotel owners who felt that enough was very much enough and managed to ensure that a break clause was put into the final agreement.
The size of the group - over 500 - created quite a prize for a sector thrown into stasis. This left owners in a kid-in-a-candy-shop scenario, assuming your kids want to spend their time in what is essentially a hotels-focused franchise fair. The global operators all had a look - even Travelodge itself set up a stall - but many were deterred by the vast spread of quality across the estate. Owners were reluctant to spend big on conversions at a time when there was no money coming in through the door, something which results season also served to highlight, as brand swapping increased, but not enough to make up for barely-bubbling pipelines.
This left a space for the innovators and gaining a few headlines from this publication at least was Ago Hotels, which described as a “landlord-friendly” platform, created by the Travelodge Owners Action Group and Accor, driven by Viv Watts and Lionel Benjamin.
Ago Hotels offered a hybrid lease model under the Ibis Budget flag, with Accor potentially investing £32m in rebranding, distribution and IT. In a call with the owners, Accor chairman & CEO Sébastien Bazin was eager to sell the story that the group was not like other hotel companies, that it was not “draconian” but flexible.
Also talking to owners was Magnuson Hotels, where fees were a simple slice with access to a global distribution network and the promise of investment in conversion and the opinion that many of the hotels could be pulled up into higher rate categories. The group has had success in the US looking at alternative demand, including extended stay, and saw much to mirror this in the UK.
Then Goodnight, partnered with Village Hotels to provide the management and operational platform and aimed to “offer landlords as close a product to what they originally had under their Travelodge lease, where investors had originally often bought the hotels for four rent cheques a year and have little appetite for or experience of operational hotel risk”. And a similar colour palette.
To read the full story, please join us here for a free 60-day trial