• Travelodge goes to the pub

The downturn has seen the competition between Travelodge and Premier Inn intensify as the two fight for market share, with their battles being played out across the media, in newspapers and on TV, occasionally involving the Advertising Standards Authority.

And Travelodge is pulling out all the stops to ensure its pace of growth outstrips Premier Inn. The latest move seeing it team up with several UK pub companies.

This development was accompanied by the appointment of Gerard Lawless to Travelodge's board as non-executive director representing owner Dubai Holding, which owns Jumeirah Group, of which he is executive chairman.

However, his international expertise will also be useful to Travelodge, which is seeking to expand its presence outside of the UK beyond its small footprint in Spain. It was acknowledged by chairman Grant Hearn, who said his  "vast experience and knowledge" would be "a great asset in helping our growth strategy and taking Travelodge into new territories both in the UK and internationally".  

The group's UK plans will see it build on its relationships with five pub operators – Greene King, JW Lees, Marston's, Mitchells & Butlers and JD Wetherspoon – to add a further 36 sites in its expansion strategy. Travelodge said that it was already co-located with pub companies on 15 developments across the UK and that it would now pursue this as a strategy.

Paul Harvey, Travelodge MD for development, said: "The pub companies have noticeably stepped up their development plans over recent months and in many parts of the country their target locations correspond with ours.

"We have been contacted by all the major players in the market and we are now pro-actively seeking out sites with them. A combined hotel/pub development is attractive to banks and funders, making the development process a lot quicker than it otherwise may be."

One of the attractions for both parties is that, with pub companies seeking to diversify into food, Travelodge guests provide a captive market, while the pub can provide the F&B for the hotel. 

The move will also cut costs through shared development – in some cases, hotels will be built next to existing pubs and in other sites the two will be built at the same time.

Travelodge has had dealings with the pub sector before, having added 52 former Innkeeper's Lodges to its estate after M&B sold them to PRUPIM for £91m.

The agreements are an echo of a previous £40m joint venture with Marston's in 2009, which saw them look for sites which could accommodate a hotel alongside a pub restaurant. The land would be purchased by Marston's, which would then construct a pub on part of the site, with the remainder leased to Travelodge. The group currently has five sites with Marston's, out of the total 15 properties co-located with pub companies.

In the last six months, Travelodge has exchanged on two properties with the pub companies. In Kidderminster it will be developing a 53-room hotel on land adjacent to an existing pub, with the development forward-funded by Marston's. In Glossop Travelodge will be opening a 62-bed hotel alongside a JD Wetherspoon of 7,000 sq ft in the re-development of the vacant Howard Town Mill.

 

HA Perspective: It is perhaps surprising that Travelodge has taken so long to team-up with pub companies given that both Premier Inn and Travelodge were able to grow quickly on launch thanks to the existing land banks of their parent groups, Forte in the case of Travelodge and obviously Whitbread for Premier Inn. These sites were next to Forte restaurants, particularly Little Chef, and Whitbread pubs.

But it is not always easy to make such partnerships work. Much was anticipated a few years ago from attempts to team up with supermarkets but these moves have failed to live up to expectations, despite some obvious synergies.

Given the distress in much of the pub market, Travelodge has a good chance to move things along faster this time.

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