Travelodge being prepared for £1bn sale

Travelodge being prepared for £1bn sale

Investment bank Deutsche Bank has been appointed to advise the owners of Travelodge about a £1 billion sale or flotation.

Goldman Sachs, GoldenTree Asset Management and Avenue Capital are thought to be eyeing an exit of the budget hotel group in the autumn.

An initial public offering is believed to be less likely than a sale, and there is speculation that Travelodge could draw the attention of an Asian suitor, The Telegraph reported.

Peter Gowers, who took the helm of Travelodge in November 2013, has since spearheaded a £100 million modernisation programme, paving the way for a change in ownership.

“Our shareholders are not natural long term holders of a hotel business and they are working with Deutsche Bank to explore their options for the future,” he said.

“While that takes place we continue to focus on driving the business forward and building on the great momentum seen in our performance so far this year.”

Revenue per available room climbed 15.2% to £35.87 in the six months to July 1, with total revenues rising 17.9% to £261 million.

Gowers said the government could help to offset the impact of the new national living wage by cutting VAT on tourism services.

Campaigners want the rate slashed from 20% to 5%.

“The government has to look at its changes as a package,” Gowers said. “[The living wage] does increase the strength of the call for a reduction in VAT on family holidays and business travel.”

The average room rate rose by 11.4% to £48.19 and occupancy rose by 2.4 percentage points to 74.4%.

Half year earnings [EBITDA] were up to £90.1 million from £75.7 million a year earlier on revenue rising by 17.9% to £261 million.

More than 85,000 customers have downloaded a mobile app since its launch in May. Booking conversion rates for customers using the app are “significantly ahead” of previous mobile website levels.

“With a combination of our strong brand and excellent web presence, approximately 90% of all bookings now come via our direct channels,” the company said.

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