UK hotel chain Travelodge is set to target the Spanish market, highlighting the potential of Iberia’s growing consumer market to provide business opportunities.

Travelodge is planning to set up 100 hotels by 2020, with the three major Spanish cities - Madrid, Barcelona and Valencia – identified as target locations.

The company said that its plans were based on the strength of demand in Spain for budget, no-frills services, with internal tourism growing and offering ample opportunities for accommodation providers.

Chief executive Grant Hearn said: "Travelodge has an important role in international markets, like Spain, which are building high-demand for the no-frills approach."

He added, however, that much of the demand for Spanish accommodation came from Iberia-loving Brits, stating: "We also know that 61 per cent of our 1.5 million UK online customer base is planning to take a trip to Spain within the next three years."

Valencia is likely to be a fruitful choice of location for Travelodge, with demand for housing and tourist services in the south-eastern city predicted to rise as the arrival of the Formula One circuit to Valencia boosts its already popular appeal.