Today’s news in brief – 8/1/23
Travelodge has secured a deal to acquire 66 Travelodge-branded hotels for £210m from its largest landlord, LXi REIT plc. The properties include locations in London, regional city centres like Birmingham and Leeds, as well as roadside locations. The acquisition aims to optimise Travelodge’s hotel portfolio and enhance its value, with plans to explore further freehold acquisitions. The transaction is set to complete on February 28, following Travelodge’s record-breaking Q3 financial results, indicating double-digit revenue growth and increased underlying earnings. The move is expected to diversify Travelodge’s freehold/leasehold split and pave the way for future growth opportunities.
Knight Frank reports that around £2bn of UK hotel transactions occurred in 2023, marking the lowest investment levels since 2012. While Q4 witnessed a strong quarter with £615m in deals, challenges like rising debt costs and a mismatch in buyer and seller expectations contributed to an overall decline. Annual investment volume fell by 37%, and overseas investors, particularly from continental Europe, played a significant role, contributing over £760m. Despite a challenging macroeconomic environment, demand for high-quality London hotel assets remained strong, with a 22% year-on-year increase in values per room. The report anticipates increased investor activity in 2024, driven by demand for operational real estate and the living sector, along with potential interest rate stabilisation.
A survey by RSM UK reveals that less than a third of UK families plan a city break in 2024, with only 27% considering longer staycations. Overall, families plan to take fewer holidays in 2024, with 33% looking to take an overseas holiday, down from 37% in the previous year. While some plan to cut back on luxuries like eating out, travel remains a priority for many. The rising cost of living and increased prices during school holidays are cited as reasons for the reduction in holiday plans. The survey suggests a potential softening in year-on-year bookings for overseas travel in 2024, especially given uncertainties around fuel prices.
Cheval Collection has appointed Taras Ettl to its development team as part of the group’s ambitious global growth plans. Ettl, with extensive experience in the Middle East, Africa, and Asia, joins at a time when Cheval Collection is expanding in Dubai and doubling efforts in Europe. Cheval Collection already operates in London, Edinburgh, and Dubai, with plans for further projects in Glasgow. Ettl’s background includes acquisitions and development roles at Kingdom Hotel Investments and InterContinental Hotels Group. The move reflects the growing demand for luxury serviced apartments worldwide, with Cheval Collection aiming to capitalise on the appeal of flexible stays and nimble operations.
