Travelodge landlord initiates action to collect unpaid rent
The landlord of budget hotel chain Travelodge, has confirmed it has "reluctantly initiated actions" to recover the debt from non-payment of rent but remains "hopeful" that the matter can be settled in the coming weeks.
A statement issued on Monday by Secure Income REIT said: "While we are extremely aware of and sensitive to the challenges facing so many businesses today in this unprecedented pandemic, Travelodge has over 580 hotels with more than 44,500 rooms and recently reported record earnings of £129.1m with net debt of c. £311m. It is owned by large, multinational investment businesses in Goldman Sachs, Avenue Capital and GoldenTree. We are disappointed and surprised that they have not yet presented a proposal."
The statement went on to say that discussions with Travelodge's senior team have been ongoing for a "number of weeks" and while they have yet to provide any proposals for dealing with the outstanding amounts due, they have indicated that a plan should be forthcoming.
On 6 April, Secure Income REIT confirmed that the outstanding quarter's rent due from Travelodge for the period of March to May amounted to 6.4% of the company's annual rental income.
As at 31 December 2019 the REIT (Real Estate Investment Trust) company had a portfolio of 161 "well established, key operating real estate assets" of which Travelodge Hotels Limited's annual rent accounted for £28.3m of a total of £110.7m.
Speaking to The Caterer on Monday a spokesperson from Travelodge confirmed the hotel chain had appointed accounting firm Deloitte and independent investment bank Moelis & Company as advisors and were working with them and their "multiple" landlords to establish a plan: "We are working very hard to get this resolved as soon as possible - a lot of effort has been going into this."
Travelodge was obliged to temporarily close its hotels in line with government instructions on 24 March but continues to operate nearly 50 hotels, from Plymouth to Aberdeen, to support key workers in the NHS and local councils. This weekend they reopened Peterborough Central Travelodge and have said they will look to reopen more if there is a requirement to do so by the government.
In February this year, before the crisis forced mandatory closures across the hotel and leisure industry, the chain opened two new hotels in East London and was set to launch a further 20 properties across the capital over the next five years. It was reported that the chain's expansion programme had the potential to represent an investment of £350m by third party investors and create around 500 jobs.
