Robert Godwin, managing director of Lamington Group and room2, talks to SAN about his plans to enter the budget hotel space by taking over Travelodge properties across the UK.
This week, room2 announced the launch of its ‘lite’ model, aimed at the budget hotel space. While the concept has been under development for around a year, the Covid pandemic and its effects on the hospitality sector has presented the company with a golden opportunity, as Travelodge went in to a CVA and its landlords look to alternative solutions. SAN spoke to room2’s Robert Godwin to find out more.
• Tell us about the plans to rebrand Travelodge properties with your new room2 lite model
“We are talking with the owners of more than 40 Travelodge properties, but we won’t be signing them all – in reality we will probably settle on about 15. They will be the ones which are most suitable for us. We’ve got a product which is basically a ‘plug and play’ solution for existing budget hotels, where we can go in and fit properties out with a better design than they had before, and with a kitchenette in each unit, which seems quite minor but is actually quite a big repositioning for the owners. It means the properties shift from a budget model to a budget aparthotel model.”
“We’ve seen through Covid that we’ve definitely had a much better ride than a lot of hotels – who have had a very difficult time – because of the length of stay and the needs of the guest. So it’s a huge opportunity for us as a company, but it’s also an opportunity for the more entrepreneurial landlords to adapt to the way the market is moving. The product is something we’ve been working on for the past 12 months but we’ve accelerated it, and it’s tailored exactly for this situation. For the right parties, with the willingness to do it, it’s a really good solution.”
• What are the main attractions of the model to landlords?
“One of the key differences is that we’re offering a hybrid lease, so there’s a fixed proportion of the rent which is guaranteed by our parent company and there’ll be a variable portion which is a a top up, so essentially the landlords and tenants will have a better long-term relationship, and landlords may have, over the long run, a greater upside. It’s designed to be very attractive for a landlord to want to convert and to give them better returns from a stable business model.”
• Where are the properties located and what effect will the launch have on the growth of your company?
“We’re looking at potential properties in towns and cities across the country, in prime and secondary locations. Our business has always been built for scale, and it’s always been built around a huge amount of tech, which is exactly what this situation is seeing a ramped up call for. We’ve got people in the wigs that we’ve been looking at recruiting for a while for certain roles as and when they come around. We have a very clear business plan for how we are going to deliver this. Our business is 50 years old and we want to be around for another 50 years so we’re not going to overstretch ourselves and overcommit. Although the headlines have said 40 or 50 Travelodge, we’re not going to do that, we’re going to limit it to 15, which is still a significant rise in our portfolio, and we’re going too make sure our foundations remain solid.”
• When do you expect to announce the first signings?
“Travelodge owners have around four months left to determine whether they want to serve notice to Travelodge to end their lease. During that period of time we’re talking to various different landlords who are moving at different paces, but the decisions will have to be made within four months.”
