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Travelodge earnings up almost 20%

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Travelodge said its earnings jumped by almost a fifth in the first half of the year as the British budget hotel chain said it planned to boost its expansion plans by building 45 hotels over the next two years.

It said earnings rose 19% to £90.1m in the six months to the end of July, compared with a year ago, driven by a growth in business travellers.

The firm said during the period it opened five hotels, bringing the estate up to 519 hotels, or 38,665 rooms, in the UK, Spain and Ireland.

The business, which is undergoing a £100m modernisation, said it would speed up its development programme, adding 45 hotels, or more than 3,600 rooms, over the next 24 months.

Chief executive Peter Gowers said: “Our development momentum is beginning to accelerate. We have already exchanged contracts for more new rooms in the first half of 2015 than we did in the whole of 2014.

“Boosted by our strong trading performance and the attractions of the value segment, major developers and financial institutions are showing their confidence in the future of new Travelodge.”

The business added that it had appointed Deutsche Bank to advise it on its long-running plans to float the business at an estimated value of £1bn – three years after its near-collapse.

The chain’s current owners Goldman Sachs, Avenue Capital and GoldenTree Asset Management took control in 2012 after Travelodge faced the threat of collapse under a £500m debt mountain.

Mr Gowers told The Daily Telegraph: “Our shareholders are not natural long-term holders of a hotel business and they are working with Deutsche Bank to explore their options for the future.

“While that takes place we continue to focus on driving the business forward and building on the great momentum seen in our performance so far this year.”

The firm, which celebrates its 30th anniversary this year, did not give a timetable on its expected flotation that has been the subject of City speculation for some time.

Travelodge opened its first hotel in Barton-under-Needwood in Staffordshire in 1985.

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