Lamington Group is in negotiations with a group of budget hotel landlords, confirmed to Hospitality Insights as part of the Travelodge Owners Action Group.
The company has accelerated the launch of its budget extended stay-brand, “buoyed by the performance of the hometel concept throughout Covid-19”.
Lamington said that it was in takes with a number of landlords who are "attracted to the renewed long-term hybrid lease structure, which includes a guaranteed fixed rent portion plus a rent portion pegged to performance”.
Robert Godwin, managing director, Lamington Group and room2, said: “The Covid-19 pandemic has caused disruption on an unprecedented scale and the hospitality industry has been one of the most affected. Many hotel landlords who previously thought their leases offered them protection suddenly found themselves at the mercy of tenants who were either unwilling or unable to pay, even those signed with strong, seemingly well financed hotel brands. As a result, whilst our near term focus continues to be working with all our stakeholders to manage our way through the crisis, we have accelerated the launch of room2 lite, recognising that, now more than ever, the UK budget sector remains ripe for disruption, particularly at a time when landlords are looking elsewhere to avoid being stuck with unfavourable reduced terms.
“room2 lite was originally borne out of our view that UK budget hotels are underserved by operators in the extended stay and design-led segment, and that there is lot of untapped potential to create truly memorable experiences. The market is dominated by large corporates, unable to pivot quickly in light of a changing economic landscape and changing consumer demands.
“Our hometel model has held up extremely well in recent months and proved its resilience despite the worst of economic cases. We now see a real opportunity to replicate this success in the budget hotel market, setting a new standard for consumers, while offering landlords a hybrid leasing model which aligns their interests with ours, and is resilient enough to drive sustainable returns over the long term.”
Last week saw the Travelodge Owners Action Group confirm discussions with Accor, Marriott International, InterContinental Hotels Group, Hilton, Jury's Inn and Magnuson Hotels.