Britain’s third biggest hotel chain has confirmed it is pumping £100m into the expansion of its Scottish business. The programme will see Travelodge adding around 30 hotels to its portfolio north of the border and creating more than 500 jobs.
News of the investment came as the group’s chairman, Brian Wallace, was in Edinburgh to celebrate his company’s 30th anniversary. The business currently employs about 700 staff in its 40 hotels north of the border.
Wallace also confirmed that Glasgow, the country’s industrial and commercial capital, would attract the focus of the expansion drive, with five new sites already identified within the city. Other locations earmarked include Ardrossan, Aviemore, Greenock, Inverness, Oban and Pitlochry.
The Fife golfing hub of St Andrews was also a key target. “We have wanted to be there for a long time, but just haven’t been able to find the right site yet,” he added.
The executive said the chain — which saw underlying profits jump 63.5 per cent to £66.2m last year — has enjoyed particularly strong growth in the corporate market which, in the past, would have gravitated toward more upmarket locations.
“We have seen a fourfold increase in the number of business travellers using our hotels, with the likes of some of the big accountancy practices now regular customers,” said Wallace. “Our performance in recent years and the investment we have made in our hotels means we are very positive about the future.”
The latest initiative is a beefing up of plans the group announced ten months ago when it envisaged building just 10 new Scottish hotels at a cost of £75m. Driven by Travelodge’s American owners it expected to fund that expansion through international investors.
At that time, chief executive Peter Gower said tourism and not corporate business was the group’s primary market. “Throughout the last five or six years, people’s desire to go on holiday or take a break has not diminished in the slightest, but they are perhaps having to be more conscious of cost,” he said.
“I think there is a big opportunity in Scotland generally where the value hotel market is only about 14 per cent, compared to 18 per cent in England and more than 30 per cent in the United States.
“Scotland’s tourism policy is targeting visitors from the British Isles, which is our target market. So there are a lot of people being encouraged to come to Scotland which, at present, has a low proportion of budget hotels,” he added.
Travelodge — which is under separate ownership from the Travelodge chain in the United States — opened its first Scottish hotel at the M80 services near Stirling in 1985. The group came close to collapse three years ago and is reportedly being lined up for a sale that would net its New York-based hedge fund owners Goldentree Asset Management and the Avenue Capital Group more than £1bn.
