Skift Take
Major hotel companies are swooping into the negotiating room for a deal with Travelodge's UK landlords because they represent the most durable line of business in the volatile industry at the moment: economy, drive-to properties.
Global hotel companies are in negotiations with the leading ownership group of a UK-based economy chain to change flag affiliation. If talks result in a deal, it could end up being the first major hotel transaction resulting from the coronavirus pandemic’s downturn in travel.
The Travelodge Owners Action Group, an organization representing the landlords of more than 400 of the 580 Travelodge — no relation to the Wyndham-owned Travelodge — hotels in the UK has been in a tense rent battle with the economy hotel chain since the pandemic forced hoteliers to suspend operations. UK hotels were only able to reopen to non-essential travelers on July 4.
Travelodge, owned by Goldman Sachs as well as hedge fund groups GoldenTree Asset Management and Avenue Capital Group, didn’t pay a round of quarterly rent due at the end of March, citing the tanked demand in travel led to lost revenue. The hotel company, which operates the hotels and pays rent to the landlords — who are responsible for keeping the real estate up to brand standards — has since worked out a deal with creditors for reduced rent with individual landlords through the end of 2021.
But the rent reduction deal struck in June also enables those landlords to consider a new operator, and plenty of companies from outside the UK are jockeying to get a foothold in the country’s economy hotel space.
“We are doing everything we can to procure as many options as possible to determine what the realistic best option may be, preferabl
