Travelodge stays in bed with biggest landlord

The hotel chain was embroiled in a row with property owners earlier this year

Travelodge has convinced its biggest landlord not to abandon the brand and move to a splinter organisation.

Secure Income, a listed property investment trust managed by Nick Leslau, announced it would not exercise a break clause across its 123 Travelodge hotels.

The decision marks a victory for Travelodge, which was at risk of its property owners deserting it to either move to other brands or set up their own chain.

Earlier this year Travelodge was plunged into crisis after having to shut hotels because of coronavirus. 

The operator withheld rent payments owed to its property owners, sparking a stand-off that culminated in a company voluntary arrangement – an insolvency process to restructure debts – being forced through the courts.

The CVA allowed landlords to break their leases within six months. 

Hospitality was one of the worst hit sectors amid the three-month coronavirus lockdown.

Dozens of hotels are expected to desert Travelodge in the New Year after setting up rival operator Goodnight

Accor, the French hotel group, has tempted disgruntled landlords with another new brand called AGO Hotels.

The decision by Secure Income not to join the exodus will come as a blow to splinter groups and a boon to Travelodge, which is owned by a trio of American hedge funds.

Secure Income put its Travelodge hotels up for sale over the summer.

However, it added: “None of these offers reflected the potential for value recovery once the pandemic has subsided. Consequently, and given the lack of certainty of outcome of these discussions, the board ultimately concluded not to pursue this option.”

Martin Moore, chairman of the trust, added: "We have carried out a thorough review of the options available to the company and are satisfied that Travelodge remains a market leading operator, albeit with ongoing capital constraints in the same challenging market facing all hotel businesses.”