Owners say ‘good night’ to Travelodge in Covid Row

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Dozens of Travelodge owners are set to desert the budget hotel chain, setting up a rival operator called Goodnight.Hard blow for Travelodge hedge fund owners, 80 hotels will sign new leases with Good Night, The telegraph can reveal.

The Goodnight brand, which is due to be officially announced later on Friday, will launch on January 1 next year in collaboration with management partner Village Hotels.

Industry sources said most owners will revert to pre-Covid terms, although some loss-making sites will have to renegotiate terms.

The move follows an acrimonious battle between Travelodge and the owners of its hotel sites following the coronavirus lockdown.

More than 90% of landlords have seen their rents cut in half until the end of next year due to a sweeping restructuring imposed on the courts in June.

Some owners will not receive any payments until the end of 2021 under the Company Voluntary Agreement (CVA).

Landlords have been forced to agree to rent cuts of over £ 140million or leave Travelodge with no choice but to call in administrators. Another £ 100million has been raised in the debt markets and its owners have pledged to inject new capital.

Owned by US funds GoldenTree and Avenue Capital and Wall Street investment bank Goldman Sachs, Travelodge closed its 564 hotels on March 24 when the lockdown began.

The budget hotel chain withheld a quarterly rent bill due in March, angered owners, many of whom were still scarred by a similar restructuring in 2012 that forced them to accept steep cuts of rent.

Many owners were exasperated by the move because they feel in trouble, fund owners have used Covid to secure more favorable terms and are expected to inject more of their own money into the business.

Sources said it was the “aggressive approach” of Travelodge owners that prompted owners to break leases and forge themselves.

Owners have the option until mid-November to waive the rental conditions agreed under the CVA.

“This has the potential to completely decimate their [Travelodge’s] company, ”said an insider of the transaction.

Goodnight advisers have reportedly been inundated with interest from owners in recent weeks and are reportedly aiming to sign 200 hotels.

Travelodge has been contacted for comment.

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