Mon, 24 May 2010 | BUSINESS SALE
A management shake-up is to take place at Travelodge in preparation for an eventual sale of the hotelier business.
The head of the UK operations, Guy Parsons, is to be promoted to group chief executive and will be responsible for the daily handling of the business. Chief executive Grant Hearn will become executive chairman, and Keith Hamil has stepped down to deputy chairman, having retired from his role as non-executive chairman.
The move comes as the hotelier seeks to capitalise on growth in the hospitality sector before putting itself up for sale. Other options believed to be also on the table are a flotation and private equity deal.
Mr Hearn gave the reasoning behind the plans: "The last seven years have been exciting. We have now doubled the size of the business and, more recently, delivered very resilient performance in one of the most severe recessions on record. Now that we are recovering, it is time for the next phase of development."
Owner Dubai International Capital (DIC) is behind schedule in its business plans for Travelodge due to the effects of the recession. It is believed that DIC aims to shed the business in 2012.
Whitbread, Britain's biggest hotel and restaurant company, which operates brands including Premier Inn, has been interested in Travelodge in the past. A sale to Whitbread is, however, considered unlikely after a previous deal fell through in 2008.
The business has a total of 390 hotels with 28,000 rooms in Britain, Ireland and Spain, and aims to expand to 70,000 rooms by 2020. Last week, Travelodge announced a £62 million investment to fund expansion of the chain with 13 new hotels including four in London. A total of 1,244 new rooms will be created. Travelodge is accompanying this expansion programme with its biggest advertising campaign to date, featuring 'Mr Sleep' and the 'Zzz squad', positioning the hotels as a great place to sleep.
It is estimated that the budget hotel market will double in size in the next twenty years.
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