Hotel chain's plea
Landlords ‘reject’ latest lease offer from Travelodge
The hotel chain wants to re-negotiate rents
UPDATE 6 May: Landlords are understood to have rejected the latest payment plan offer from cash-strapped budget hotel chain Travelodge.
The operator has warned that revenues could fall by half this year and a 1% drop in revenue per room would equate to a £5m to £6m fall in EBITDA. Total revenue could decrease by £350m over the next year.
It asked landlords to forfeit up to £146m in rent over the next 18 months, with the offer of a lease extension to make up for the loss in rent and a share in profits if the company performs strongly.
But this does not appear to have satisfied landlords who have already rejected the offer once, with many saying the firm received lease extensions after it was put through a CVA in 2012 and sold to the current owners. One told Property Week: “What [Travelodge] has offered is meaningless. The reality is that they might CVA in a year or two.”
Shareholders have provided a £60m facility to Travelodge while lenders to Britain’s second-biggest hotel chain have hired the investment bank Moelis and the accounting giant Deloitte to seek a deal with its landlords, including rent-free periods.
The company did not pay its quarterly rent bills last month, telling landlords that its “comprehensive plan to stabilise the business” included asking them to suspend payments.
Property investor Nick Leslau’s Secure Income REIT has begun legal action against the owners of the chain over the non-payment of rent.