Hotels|

Travelodge and Arcadia Group Sign Joint Venture

Arcadia Group Limited + Travelodge = Topshop HotelTravelodge, the budget hotel chain, has acquired 22 new hotels throughout the UK, which includes its first property in its joint venture with Arcadia Group, the owner of Topshop. Total, this investment is worth £165 million. The joint venture between the hotel chain and high street clothing retail owner includes a 35-year lease.

Arcadia is set to forward fund the development of a 96-room Travelodge over its biggest Topshop in Edinburgh, and they hope to have it open for guests by the summer of next year. Just this construction alone represents a £10 million investment. When the hotel does open, there will be 1,230 hotel rooms at 13 hotels in Edinburgh. With another 85-room hotel under construction in the city and due to open the same summer, the hotel chain is creating 40 new jobs.

Aside from these two hotels, other constructions will be underway in Southgate, Sutton, Enfield, Walthamstow and Bethnal Green. Hotels are also planned to open in Bedford, Altrincham, Aylesbury, Woking, Loughborough, Hemel Hempstead, Barcelona, Kings Lynn, Gatwick Airport and Glasgow Airport. Along with these sites boosting Travelodge’s portfolio to 540 hotels and 39,957 rooms, it is also expected to create jobs for 1,300 workers in Britain.

Travelodge chief executive Guy Parsons commented on the Arcadia joint venture, saying that the company forward funding the new hotel in one of Edinburgh’s most prestigious areas shows how flexible the budget hotel chain’s development model is. They will utilise space over four floors above the largest Topshop store in Edinburgh on Princes Street. This space had previously been used for storage and offices. This is really one of the most prominent sites left in Edinburgh, as there are a lack of new development sites, and they are delighted to have acquired it.

Parsons also said that the strength of the company’s growth model has been clearly demonstrated. The first six months of this year were the strongest in Travelodge’s history, he noted. They are doing more than just exchanging contracts. They are securing financing for these constructions upfront so that developers can begin to work on the sites immediately. Everyone knows the difficulty of being approved for funding from a bank in this current economic climate, so to have financing for so many new schemes already must be one of the UK property industry’s biggest success stories, he added.

Aside from the 22 hotel properties that Travelodge has recently secured, the group is also building 43 new hotels throughout the nation right now, and 21 of these are expected to be open by the end of this year. These new exchanges also come after the group announced plans in May to roll out a smaller Metro concept at snooker halls, office buildings and pubs – converting them into hotels with 20 to 40 rooms. The chain aims to have 100 of these in prime locations across the nation by 2020.

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