The budget hotel group Travelodge today announced plans to double in size over the next six years, in a move that will intensify competition within the industry.

The company said it would add 15,000 rooms by 2011 and create 4,500 jobs within three years, ending speculation of a stock market flotation.

Two years ago, the group was bought by the private equity firm Permira, which also owns the Little Chef restaurant chain. As part of its expansion, the company plans to spend up to £20m on revamping the Travelodge brand for the first time in two decades.

The updated logo will feature a person snoozing on a pillow above a new typeface. Its Park Royal hotel in London will be the first to feature the new design.

Grant Hearn, who has run Travelodge since its £715m acquisition from the catering group Compass, said the new logo was intended to mark an end to the group's "slightly tired, conservative, 1980s image".

The announcement comes after Travel Inn, part of the Whitbread leisure group, beat off competition from Travelodge to acquire 141 Premier Lodge hotels from the pub operator Spirit Group last year. Whitbread has since rebranded its enlarged 461-strong estate as Premier Travel Inn.

Whitbread today announced the sale of its Marriott UK hotels for £1bn in keeping with its strategy of focusing on its budget hotels, David Lloyd health clubs and the Brewers Fayre and Beefeater restaurant chains.

Figures released by Travelodge today showed that sales rose by 13% to £163m during the 12 months to December 31. The rise was driven by a significant increase in online bookings and the opening of 17 new hotels. Revenues per available room were 6% higher than a year ago, mainly due to an improvement in occupancy, which was up three percentage points to 73%, the company said.

According to Travelodge, the budget hotel sector is expected to expand to 100,000 rooms by 2010, making it the fastest growing part of the UK hotel business.

This year, Travelodge plans to add 2,500 rooms to its current total of 15,000. Despite the expansion, it will trail Premier Travel Inn, the market leader with more than 28,000 rooms in 461 locations.

Mr Hearn said a great deal of vital work had been completed since the acquisition from Compass, including the disposal of non-core assets and freehold property, enabling the company to repay more than £400m of debt.

He added: "We have serious plans to drive the growth and usage of the budget sector. We want people to save money by staying with us."

Guy Parsons, sales and marketing director at Travelodge, said: "We know that people are starting to use budget hotels in the same way that they do low-cost airlines and we are well placed to deliver that offer."

Today's news comes just months after Permira confirmed it would sell off most of its Little Chef restaurant business.

It plans to hold on to the 115 outlets situated next to its Travelodge hotels and will put the remaining 182 up for sale early next year, along with the Little Chef brand. The brand will be franchised back to it by the new owner.

Last year, Little Chef executives claimed that the roadside restaurant logo had become dated and proposed slimming the waistline of the well-known tubby cook called Charlie. Some 15,000 customers objected to the move and the idea was swiftly abandoned.

In the case of Travelodge, Permira hired image consultancy Creative Edge to research and design the new logo, which has been extensively tested in focus group meetings.

The updated logo will appear on new roadside signs and on vertical banner adverts hanging from every Travelodge building.