The owners of Travelodge are in talks to buy up millions of pounds worth of hotels from their landlords, fuelling speculation the business could be sold.
US-based Goldentree Asset Management is looking to purchase £40m of hotels, The Sunday Times reported.
It follows the £210m purchase of 66 hotels in a number of City locations from landlord LXi Reit earlier in the year.
Travelodge leases hotels from third party landlords. The move to purchase more freeholds from its landlords will fuel City speculation that Golden Tree, which took over Travelodge in 2012, will sell the business.
The hedge fund last year explored a £1.2bn sale of Travelodge, which was motivated in part by a post-pandemic boom in demand.
The budget hotel group reported record-breaking third quarter results in November, with underlying earnings up 22.4 per cent to £201.2m. Shares are up over 20 per cent in the last 12 months.
Travelodge has long pursued an “asset-light” business model, contrary to rivals such as Premier Inn, which directly owns the majority of its freeholds.
After purchasing the LXI Reit hotels in January, the firm said it planned to explore “further freehold opportunities” to diversify its asset base.
Golden Tree has created a structure that increases its options to cash out of the hotel chain, according to The Sunday Times.
Travelodge and Golden Tree were approached for comment.