May 03–BUDGET hotel group Travelodge has set its sights on adding another 250 UK hotels to its 500-strong chain in the next few years as it continues its turnaround strategy.

The chain, which in 2012 was taken over by lenders in a pounds sterling 635 million debt restructuring and underwent a company voluntary arrangement to avoid collapse, has been modernising its hotels and increasing its marketing budget to drive up occupancy rates and room revenues.

In accounts just filed, the firm – now owned by US private equity outfits including GoldenTree Asset Management and Avenue Capital Group – showed an increase in sales from pounds sterling 426.4 million to pounds sterling 480.9 million in the year to December 31, 2014, while pre-tax profits soared from pounds sterling 37.3 million to pounds sterling 83.9 million. Just two years ago Travelodge made a pounds sterling 71.1 million loss.

The directors said its investment programme was nearly complete, with more than 90 per cent of rooms redesigned. Five hotels opened in 2014, leading to a total of 38,430 rooms at sites across Britain, Spain and Ireland, and the firm said last year’s momentum was continuing.

The company expects to open five hotels this year. The directors said: ‘We are on track to continue our turnaround. We see considerable potential for further like-for-like sales growth and are targeting the roll-out of the brand to at least 250 further sites.’

But landlords will be less pleased with the performance. Under the CVA’s terms, the firm set up a fund that would pay up to pounds sterling 10 million to landlords affected by the restructuring. But some missed targets mean the fund has halved in value.

(c) Mail On Sunday