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Travelodge asks councils for cheap hotels

08 | 10 | 13

Travelodge has written to 124 local councils asking them to work in partnership with the company to develop budget hotels.

The chain is looking to make use of low-interest loans from the government. It has previously achieved this with two hotels - one in Eastleigh Central and another in Aylesbury - which were funded through the Public Work Loans Board, with five more underway with the same backing.

It is willing to cooperate with councils in either stand-alone buildings or mixed-use schemes on surplus land. Councils would then lease the hotel to Travelodge for 25 years, repaying the debt through collected rent.

Travelodge's managing director for property Paul Harvey said: "The deals we have done so far have provided a great investment opportunity for both parties and as a result of this innovative calibration, we have today written to 124 other local authorities across England and Wales to see if we can work with them on a similar scheme."

He said that both Eastleigh Central and Aylesbury Vale were "innovative and enterprising local authorities" that have taken the chance to add new facilities to their respective areas - which he believes will offer a good return of investment.

The catering industry will be watching this development with bated breath, as budget hotels are often synonymous with on-site dining.

Recent news from rival chain Premier Inn also suggests that such hotels are on the rise. Whitbread, the company's owner, reported an increase of 11.5 per cent during the 11 weeks leading to August 15th. It said like-for-like sales were up three per cent and 1,270 new rooms have been added as a result of the demand. Stronger growth was reported in London - up 17.7 per cent in six months.

Mr Harvey stated that Travelodge is the first budget hotel brand in the UK to work cooperatively with local authorities in this manner. It remains to be seen if other companies will follow suit, yet both Premier Inn's success and Travelodge's new approach suggest strong growth for hospitality.ADNFCR-16001031-ID-801647064-ADNFCR

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