Travelodge to file for form of bankruptcy to save 10,000 jobs
Budget hotel chain Travelodge is to file for a form of bankruptcy after losing £350 million of sales due to the lockdown.
It said that it has no option but to apply for a Company Voluntary Arrangement to save 10,000 jobs and secure its long-term future.
A CVA allows an insolvent company to continue trading and gives it a fixed period to pay its creditors.
Travelodge is asking landlords to accept a 38% rent cut on its 564 hotel portfolio until December 2021, after which it has promised full rents will be paid.
Under its proposal, about 94% of its landlords will receive at least 50% of their rent until the end of next year, but 37 leases (6% of the total), including some loss-making airport hotels, will receive no rent until 2022.
To try to persuade landlords to accept the CVA, Travelodge is offering them a 50% share of any profit above £200 million over the next three years. In the last three years, it made at least £300 million.
Travelodge shareholders have agreed to take on a further £100 million in debt and pump in an additional £40 million in new equity.
All Travelodge’s hotels have been closed since March 24 and aren’t expected to reopen until July 4 at the earliest. In a normal year, the company would make 70% of its profit between April and September.
It expects its profits to be halved this year, losing £350 million, which is the equivalent of 18 months’ rent.
The hotel chain said that if its creditors accept its CVA, it doesn’t plan to permanently close any of its properties.
A creditors’ meeting will be held on June 19. Holders of three-quarters of its debt must agree to the CVA or Travelodge could face voluntary liquidation.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
CCS Insight: eSIMs ready to take the travel world by storm
Germany new European Entry/Exit System limited to a single airport on October 12, 2025
Airlines suspend Madagascar services following unrest and army revolt
Qatar Airways offers flexible payment options for European travellers
Air Mauritius reduces frequencies to Europe and Asia for the holiday season