Creditors at Travelodge have voted decisively for the troubled hotel chain to enter into a company voluntary arrangement (CVA), thereby saving it from administration.

The vote, which saw 97% favour the proposal, will see the budget hotelier write off £709m of debt, with an injection of £75m in equity that will pave the way for a £55m refurbishment programme across 175 of the business' hotels.

It is the latest step in the efforts to turn around the struggling chain, after its creditors - Goldman Sachs, along with two US-based hedge funds - took full ownership of Travelodge last month.

Brian Green, restructuring partner at KPMG and joint 'supervisor' of the CVA said: 'We are pleased that landlords have recognised that the CVA will deliver a better return to them and estimate creditors will receive a return of 23.4p in the £1, versus the 0.2p in the £1 they would have received if the business had been forced into administration.

'Following our work on the Fitness First CVA we have listened to the views of landlords and incorporated their feedback into this proposal. This includes a claw-back clause, to enable landlords to share in the turnaround of the business, and the assurance that the company will pay the business rates on the affected properties until replacement occupiers are found. We are also offering landlords the option to extend their lease terms, which has not been offered in a CVA before and is an addition designed to offer as much value to landlords as possible.