Whitbread to merge Premier Inn and Travelodge hotels

Source: Stock Market Digital

Date :17/03/2008 14:10:02

Hotel owners Whitbred Plc and Dubai International Capital are in talks to combine and create a £3 billion group of eight hundred hotels.

Just weeks after Whitbred spoke of its money-saving plans to fold Premier Inn hotels, Beefeater restaurants and Brewers Fayre pubs into a single chain, plans have been announced to combine Premier Inn with its biggest competitor, Travelodge.

Leisure and catering group Whitbred have been anticipating a merger for some time – Whitbred lost out to DIC for the purchase of Travelodge from Permira, the British buyout firm, at the end of 2006.

Budget hotels

It is not yet clear whether the new business would be run by Whitbred’s Alan Parker - set to retire in 2010 – or Travelodge chief executive Grant Hearn, although reports have suggested that Whitbred intends to buy Travelodge from DIC in return for a stake in the company in the form of cash and shares.

It is however certain that the move will make a lot of money – an estimated £3 billion by creating the biggest brand-name in the booming market of budget hotels.

This market is thought to be expanding at four times the pace of the overall hotel sector as companies look to the potential offered by the London Olympics in 2012.

March 17, 2008