The Travelodge Owners Action Group – a coalition of Travelodge landlords, representing more than 400 hotels – has launched AGO Hotels, a new platform that will see the budget hotelier replaced with French hotel chain Accor.
Viv Watts, managing partner of landlord Oasis Holding and co-ordinator of the action group, said AGO Hotels had been set up as a landlord-friendly solution for property owners seeking to exercise their break option from Travelodge following last month’s CVA deal.
The business has been structured as a hybrid lease platform that offers 25-year FRI lease terms, a major equity stake in the business for all incoming landlords, plus profit participation and long-term, low-risk and inflation-hedged cash flows.
Under the structure, landlords will also be offered immediate rent reviews. Base rents will be derived directly from Travelodge pre-CVA rents.
Accor has been selected as a preferred brand partner for the AGO Hotels platform. Its Ibis brand will replace Travelodge.
“Crucially, property owners are being offered equity ownership in this hybrid lease platform, providing landlord participation in individual hotel as well as portfolio profits,” said Watts. “The platform has very significant expansion potential and offers the best of both worlds – institutional leases and operational participation. By making the owners partners in the business, the AGO Hotels platform is a disruptive business model, protecting the income and values upon which so many individuals, local authorities and charities rely on.”
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