Two councils in Lincolnshire face losing out financially after budget hotel chain Travelodge announced new restructuring plans.
The operator, which runs nearly 700 hotels, and is owned by investment firms including Goldman Sachs, has started bankruptcy proceedings by entering into a Company Voluntary Arrangement to restructure its business while keeping its hotels open.
According to national media, the firm says it could lose around £350 million in sales due to lockdown and put 10,000 jobs at risk.
According to national media, bosses are attempting to renegotiate up to £146million in rent, asking some landlords for up to 100% rent reductions until 2022, and others 75% from March to December and 30% next year.
West Lindsey District Council bought a £2.35 million Travelodge in Keighley in October 2017. It was hoped to bring in around £90,000 a year for the authority.
It also spent £1.6million towards a £4 million hotel in Gainsborough in partnership with Dransfield Properties. This facility opened in 2018.
As of October 2019, the authority had spent £20.445 million on six commercial properties cross Sheffield, Gainsborough, Keighley and Doncaster.
An authority spokesman, however, said: “We cannot comment on this at this time.”
The City of Lincoln Council bought the Tentercroft Street Travelodge for £13 million in March 2018, and planned to lease it to the chain for 25 years with the option to double that at a later date.
It hoped to make a return on the investment within 30 years with money reinvested into maintaining key services.
Jaclyn Gibson, Chief Finance Officer at City of Lincoln, said they, along with other creditors, would be taking part in the vote on whether or not to approve the company’s plans.
They said: “We will be giving their proposal due consideration over the coming days before submitting our response.”
According to the hotel’s website there are 10 hotels across Lincolnshire, North Lincolnshire and North East Lincolnshire.