A new budget hotel has opened in Dundee with a deal to share profits with the building’s landlord for 25 years.
The 32-bed former Travelodge on the Kingsway is now operating as part of the ibis budget brand under an agreement with AGO Hotels.
AGO is a partnership of hotel group Accor, Gullwing Hospitality and international investment company Oasis Holdings.
It was launched last year by Oasis managing partner Vivian Watts and hospitality industry veteran Lionel Benjamin in the wake of a Travelodge company voluntary arrangement (CVA).
The Travelodge CVA shaved nearly £150 million from the chain’s rent bill, with some landlords sacrificing rent payments until 2022.
Other landlords sought alternatives – such as AGO, which pools risk through a hybrid lease structure.
It guarantees landlords their rent as well as a share of the hotel’s profits.
‘Raring to go’
Mr Benjamin said he was “so pleased” to see the Dundee hotel open.
He said: “Our teams across all of our hotels are raring to go.
“We look forward to providing a comfortable and affordable setting in Dundee for those travelling for work, enjoying a staycation or visiting friends and family.”
Co-owner Mr Watts said the group’s innovative operating model had shown resilience during the pandemic.
She said: “It is fantastic to see UK hotels turning the lights back on.
“Despite launching AGO in the height of the pandemic, our distinctive hybrid lease model has shown its resilience.
“We have continued to grow rapidly. We are also able to proudly say we have continued pay full rents to all AGO landlords.
“Now, we are looking forward to welcoming guests into our existing hotels, as well as continuing to look for new locations across the UK.
“We can drive returns for landlords through our profit-sharing lease model.
“Our business model will guarantee rent and include owners in the hotel’s profits as the market returns to normalcy.”