AGO Hotels lays out pitch to Travelodge landlords ahead of lease extension deadline
AGO Hotels has laid out its pitch to tempt disgruntled Travelodge landlords ahead of a deadline to sign up for a lease extension with the budget group.
The lease extension was offered by Travelodge as a means to offset temporary rent reductions passed through a Company Voluntary Arrangement (CVA) in June. If landlords enact the lease extension, which they must do by tomorrow (28 August) they will forfeit a break clause option, which in the majority of cases is available until mid-November.
The CVA approved a 38% total rent reduction for the Travelodge group, which proposed to pay landlords £230m, approximately 62% of rent due, between April 2020 and the end of 2021, with no hotel closures.
In response AGO Hotels was launched by the Travelodge Owners Action Group, a coalition of landlords of more than 400 Travelodge hotels, to allow landlords to exercise their break clause and instead rebrand under Accor's Ibis brand.
This week AGO issued legal documents detailing its pitch to the owners of more than 400 Travelodge properties. The Caterer understands that some operators have already signed up to make the move, with the action group saying it expected more interest over the coming weeks.
Sebastien Bazin, CEO of Accor, said AGO presented an opportunity for landlords to "venture forward into the future of commercial real-estate where you can be an actor rather than a spectator of your fate".
AGO Hotels has been structured as a hybrid lease platform, offering a major equity stake, including 25-year leases with Accor selected as a preferred brand partner.
The platform has resulted from a request for proposal (RFP) process managed by Viv Watts (managing partner of Oasis Holding) who co-ordinates the Action Group, with hotelier Lionel Benjamin.
Under the AGO Hotels structure, landlords will be offered immediate rent reviews; base rents will be derived directly from Travelodge pre-CVA rents.
Accor will operate as a brand operator (franchisor), with no involvement in the lease or ownership structure, and has agreed to fund the platform to enable properties to rebrand. Should the entirety of the action group opt for the change, Accor will more than double its British and Irish portfolio.
AGO Hotels is not the only platform launched in the hope of enticing Travelodge landlords with Goodnight Hotels, in partnership with Village Hotels, having also laid out a pitch.
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