Budget brands Travelodge and Lidl are developing a £3 million joint hotel and supermarket site in Newcastle-Under-Lyme, Staffordshire.

Lidl will take 14,000 sq ft on the ground floor, with Travelodge’s 82-room hotel taking the top five floors on a previously redundant site.

The joint development will create 45 local jobs and represents a £3m investment.

Paul Harvey, MD 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.’