Travelodge's largest ever hotel will form part of its next wave of expansion in yet another sign the low-cost player is putting its high-profile restructuring behind it.
Construction has started on the 395-room flagship hotel which will be on London’s Middlesex Street, close to the iconic Gherkin, and open in 2018.
The project was announced alongside substantial growth plans for this year when 15 hotels will be opened across the country, including five in the capital and at major shopping centres including Lakeside at Thurrock in Essex.
The company's huge debt pile led to a restructure in 2012 which saw turnaround specialists GoldenTree Asset Management, Avenue Capital and Goldman Sachs take control of the company from Dubai International Capital in a debt for equity swap.
The trio ploughed £75m into the company and in 2013, former Hilton deputy chief executive Brian Wallace was installed as chairman while Peter Gowers, who had previously held senior roles at Holiday Inn owner InterContinental Hotels, joined as chief executive later that year to help spearhead the turnaround.
Travelodge completed a £100m upgrade of its hotel rooms in December 2015, the same year it also recorded £100m in operating profits for the first time in its then 30-year history.
The openings in 2017 will create 325 jobs and take the number of Travelodge sites up to 558 in total across the UK, Spain and Ireland.
Mr Gowers said the company had recently sought to better target the business community as well as the growing trend for leisure customers to combine shopping with an overnight stay in a nearby hotel, something the new locations would build on.
A total of 10 of the new openings will also include a bar/restaurant, bringing the number of locations with on-site dining to 174.
Mr Gowers said the low-cost segment of the hotel industry was the “fastest growing in the UK and globally”.
“And we still think there is a long way to go,” he said.
“Just one in five UK hotel rooms are in branded budget hotels whereas it is one in three in the US. It’s only one in seven in London so clearly there is a lot further to go.”
Mr Gowers acknowledged the pressures on businesses such as his from rising costs - with Travelodge’s business rates rising by 10pc or £3.3m thanks to the recent revaluation - as well as the national living wage.
But he said the company paid the national living wage to employees below the age of 25, above which the rate becomes a legal requirement.
Mr Gowers said this was an indication of how cash generative the business was, something which should help the company hit its aim of building 20 hotels on average over the next three years.
The chief executive reckoned another 250 sites had been identified for potential Travelodge hotels, with London likely to be a key location given he claimed average hotel prices were almost twice the level of the UK regions.
“Customers are crying out for more good quality, low-cost places to stay,” he added.