Travelodge will remain in Redhill’s Warwick Quadrant, despite problems with the rent which led to Reigate & Banstead Borough Council holding talks with a potential new operator.
The rent issue centres on a Company Voluntary Arrangement (CVA) that Travelodge agreed in June with its landlords across the country, after the hotel chain was hit financially by the coronavirus pandemic.
Under the CVA, Travelodge was able to cut its rents, with terms varying by site, including some rent-free periods.
The full details remain confidential, but last summer the council reckoned it would receive none of the £316,812 annual rent during the 2020-21 financial year.
A council report said: “Travelodge … has applied for a Company Voluntary Arrangement (CVA), a legally binding agreement with the company’s creditors to allow a proportion of the debts to be paid back over time, and some to be written off, typically lasting between two and five years.
“The creditors of Travelodge including the council are opposing the application. If it is successful it could result in a shortfall in the region of £0.317m.”
Council papers in November confirmed the council was in “negotiations with another hotel chain to take on the lease”.
But last week the council told reigate.uk that Travelodge will stay after all.
Asked for details and the position on past and future rent, the council said: “The council were content to agree the deal based on the offer tabled by Travelodge within the CVA, however we are unable to elaborate further.”
A Travelodge spokesperson confirmed the chain would stay, but that the council would have any further information.
The hotel, at 26 London Road, opened in December 2017, after the council redeveloped the Warwick Quadrant.
It’s just one of the council’s investments: last summer the council forecast receiving £1.6 million from its 31 other commercial and industrial sites during 2020-21.
That’s only a small part of the council’s revenue, with its annual spending of £81 million financed 79% from income, 18% from council tax and 3% from Government grant.
Like many authorities, the council has increased its portfolio over recent years.
A council spokesperson said: “With significant reductions in the levels of central government funding the council receives over recent years, it is appropriate for us to look for commercial opportunities within the borough that complement our corporate aims.”