If Travelodge owners reckon it is worth £1.6bn (enterprise value), Shore cap estimates Premier Inn owner Whitbread is worth all of £43 a share or 26% above its current share price.
Whitbread is bigger, generates greater revenue per room, is more profitable and has a significant freehold backing, said the broker.
“With a bigger, more profitable estate, Premier Inn commands a material valuation premium to Travelodge.
"We would see a 15% premium, or c.£85,000 per room, as a starting point."
Including the operating assets at 8 times EBITDA (c£40,000 per room) would imply a fair value for the UK estate of £8bn (£95,000 per room), equivalent to 12 times underlying profit (EBITDA) and towards the top end of the range.
A positive update is predicted when Whitbread updates for the first quarter on 22 June and 'buy' is the broker’s stance.