Travelodge will initially target major cities including Madrid, Barcelona and Valencia before rolling out to other major cities, suburban areas and airports. Each hotel will have approximately 80-100 rooms and will mirror the UK budget model, with room prices starting from 20 Euros online.

Travelodge's expansion in Spain follows a successful pilot of three Spanish hotels - two in Madrid and one in Barcelona. A burgeoning tourism market*, favourable economic conditions and significant growth in internet usage** were the key drivers in the decision to expand in this region. Travelodge will primarily target domestic travellers and then its strong UK customer base that regularly travels to Spain.

Grant Hearn, Travelodge CEO, commented: "We are very excited about our plans for Spain - an important part of Travelodge's longer-term growth strategy. While there is a very strong growth outlook in the UK for the next 10-15 years, we have demonstrated through our pilot that the Travelodge model works in Spain and the time is right to capitalise on this demand."

"Spanish consumers' appetite for budget products, coupled with a surge in internet usage complement our low cost brand and internet sales model. Travelodge has an important role in international markets, like Spain, which are building high demand for the no frills approach."

The Travelodge move represents the first genuine budget branded offer in Spain's hotel sector and follows successful Spanish launches by other budget leaders, such as Ikea and easyJet.

"There are just 100 budget hotels in this country and with Spanish travellers taking 143 million* domestic trips a year, we think market potential is huge. We also know that 61% of our 1.5 million UK online customer base is planning to take a trip to Spain within the next three years. We are confident that we can deliver strong occupancy and growth through a combination of these two markets," said Grant Hearn.

Travelodge plans to use the same leasehold model that is facilitating its £3.5 billion growth strategy in the UK.

The budget chain plans to have five additional Spanish hotels open and a further 15 sites in its pipeline within the next three years. Travelodge will develop the remaining properties between 2010 and 2020.

To drive Travelodge's Spanish growth, the budget chain has appointed Horacio Alcala as its Development Director for Spain. Horacio has joined Travelodge from the role of Director of Hotel Investment at Metrovacesa - continental Europe's largest publicly-listed property company. Prior to this, Horacio worked as a developer for GDO and MedGroup, focusing on the roll-out of limited service hotels in Spain.

Horacio will work alongside Travelodge's Spanish Operations Manager, Mireia Jane, who has overseen the company's existing three hotels for the last four years. Both will report to Paul Harvey, Travelodge's board director for property and development.

*Spanish tourism statistics - Source: Instituto de Estudios Turísticos (National Tourism
Research Institute).

• Spanish travellers made a total of 143,4 million journeys in 2006
• In 2006, Spain received 58,5 million inbound trips - up 4.5% on 2005
• Tourists' expenses added up to 48.227 million Euros in 2006 - up 4.8% on 2005
• The tourism market was valued at 99.183 million Euros in Spain in 2006 - 11% of the Gross Domestic Product GDP - an increase of a 3% with regard on 2005
• During June of 2007 Spanish travellers made a total of 12.4 million journeys of which 93.5% were trips inside Spain

**44.4% of Spanish consumers are frequent internet users - this has risen 12.4% in the last year alone.