|Travelodge CEO Peter Gowers|
Big news from the budget hotel scene today, as the owners of the British chain Travelodge are reportedly considering a sale of the company that could value it at more than $1.4 billion. The sale, as the Times notes, comes just three years after the hotel chain’s current owners—Goldman Sachs, Avenue Capital and GoldenTree Asset Management—took control of Travelodge from Dubai International Capital as part of a massive financial restructuring that reduced its debt to $480.6 million from $927 million.
According to the International Business Times, the sale is likely to take place in the next nine to 12 months. Travelodge is one of U.K.’s largest hotel chains and has seen solid numbers over the last year. The East Anglian Daily Times is reporting that EBITDA for 2014 rose by 63.5 percent to £66.2 million as Travelodge benefited from improved room occupancy and rates, boosted by business customers. The company saw an 15.1 percent increase in average room rates to £45.33. Occupancy was also up by 1 percentage point to 75.5 percent. Revenue last year rose 14.9 percent to £497.2 million while RevPAR was up 16.8 percent to £34.24.
“The momentum we saw in 2014 has continued into the new year and we have seen an encouraging start to 2015," Peter Gowers, Travelodge CEO, said in a statement. "The value hotel market remains strong and we continue to outperform our competitive set. We see considerable potential for further like-for-like sales growth.”
A £100 million modernization program is nearing completion, while five of 15 hotels expected for 2015 (for an expected addition of 1,300 rooms) were already open. The chain has opened more than 500 hotels since launching in 1985 and has identified 250 more sites across the UK for expansion. The first 150 of these are expected to be opened over the next eight years. The new hotels for 2015 include London locations at Wembley (opened in February), Richmond and Greenwich; a new central Glasgow property and key regional locations including the Thames Valley tech corridor, Southampton (opened in March) and Bristol. "Secondary market sales for Travelodge hotels have been strong," Gowers added, "and our shareholders acquired 144 Travelodge hotels from independent landlords during 2014."