Travelodge cuts rates by 40 per cent

The budget airlines have long been engaged in price-cutting competition to snatch customers - and now the lower-price hotel firms are at it.

Travelodge is slashing its room rates by 40% as the economic downturn threatens to put many hotels out of business.

Its response will dismay many independent hoteliers, who do not have the finances to support a loss-leading exercise.

There's no evidence that this is aimed at deliberately putting any smaller properties out of business, but according to Will Hanbury, head of the hotels and leisure team at Westcountry accountancy firm Bishop Fleming:

"While independent hoteliers are battling with these trying conditions, the new wave of budget hotels are actively seeking and finding new locations in this region - many of which involve the acquisition of existing independent hotels."

Travelodge considers job cuts to fund price war >>

Hoteliers told not to slash rates in response to slowdown >>