National hotel chain sees “growth milestone” with 14 new locations and 1,000 rooms
As part of its expansion plan, AGO Hotels has announced the addition of three new hotels across 14 locations and 1,000 rooms across the UK.
The new hotels include the former Grange Bracknell Hotel, Orchard Hotel Gloucester, and former Travelodge Thurrock M25. The addition of these new hotels represents an increase in AGO’s number of rooms by more than 90 per cent in 10 months.
Since launching in December 2020, the company has expanded to a team of almost 200 staff, with growth fuelled by a recovery in the UK hotel sector and the strength of AGO’s lease model.
AGO has reported a 28 per cent increase in occupancy across its portfolio in Q3 of 2021 versus Q2 2021, kick-started by an influx of ‘staycation’ bookings and boosted by the return of business travel as Covid-19 restrictions have eased.
The company’s 25-year FRI leases offer a combination of guaranteed fixed rents, together with genuine profit participation, calculated on the basis of each hotel’s EBITDA. AGO’s first brand partnership with industry giant Accor resulted in the rebranding of nine economy hotels under Accor’s economy brand ‘ibis budget’.
Mr. Viv Watts, co-founder of AGO Hotels, added: “Reaching 1,000 rooms in our portfolio is an early growth milestone for our business, with much bigger goals in mind. When we launched AGO in 2020, we were confident our hybrid lease model would be attractive to real estate investors as well as hoteliers and it is wonderful to see the vision bearing fruit.
“We have proven our ability to deliver rents in weak markets, not least throughout the 2021 Covid-19 lockdown, and look forward to paying profit rents to our landlords in the months ahead.”
Mr. Lionel Benjamin, co-founder of AGO Hotels, said: “The AGO team are delighted to add these three hotels to our portfolio, strategically located across key regional hubs.
“These additions to the portfolio demonstrate a continued and growing confidence within the hotel sector, and stronger returns in occupancy as we emerge from national lockdowns and the lifting of travel restrictions.
“AGO is in a significant phase of growth as we welcome guests into our new hotels and continue to look for new opportunities across the UK. The signing of these additional hotels is testament to a model which has paid rents through Covid and will deliver profit rent for Q3.”
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