Travelodge, the UK-based hotel operator, has combined with Lidl to develop a joint 82-room hotel and supermarket development in Newcastle-Under–Lyme, Staffordshire.

It is the second partnership agreement Travelodge has made with a budget supermarket chain and follows the opening of a 55-bedroom hotel in Middlesbrough in collaboration with Aldi. Paul Harvey, managing director for Development at Travelodge, said: "The budget sector is the place to be in the current environment, with many people trading down as they seek to economise.

"We expect to see a structural change in the hotel industry over the next few years, with people realising that they do not need to spend a fortune on overpriced accommodation to get the quality they want in the locations they need. "Given the market conditions, it is likely that we will be going into partnership on further sites with the budget supermarkets in the future".