Easyhotel reveals portfolio growth in continued UK and European expansion

Budget hotels operator Easyhotel's UK and European expansion efforts this year have resulted in a 42 per cent jump in its portfolio size, a trading update this morning revealed.

The figures

In the financial year ending 30 September 2018, Easyhotel opened five new hotels owned by the company, and four new franchisee hotels. Combined, this resulted in a portfolio size increase of 42 per cent for the year to a total network of 33 hotels across 27 cities.

The group added plans for six new owned hotels and seven franchised hotels in the pipeline over the course of the period.

Consequently, total sales rose 25 per cent for the year to £37.5m, up from £29.7m.

Revenue per advertised room (Revpar) at its owned hotels rose 11 per cent, while at its franchised hotels, like-for-like revenue rose 12 per cent.

In London, Easyhotel said it is planning to undergo a full refurbishment of its Old Street site at a total cost of £7m to the business, meaning the entire building will be shut down from December onwards. It's expected to re-open in the second half of 2019 as a multi-purpose venue, split between an 89-bedroom hotel and 15,000 square feet of office space.

Why it's interesting

The figures show significant investment has been ploughed into expansion of its portfolio throughout 2018, though we won't know what this has done to profits or losses until the group files its full accounts on 6 December.

Additionally, the trading update has revealed a large proportion of its investment has gone into building its network of franchised hotels in Europe. While just one owned hotel has opened in 2018 in Barcelona, there are plans for seven new franchised hotels across Europe in Switzerland, Spain and the Netherlands.

For its future pipeline plans, the board will target 10 to 15 cities across Spain, France and Germany in each of the three countries. 

What Easyhotel said

Easyhotel chief executive Guy Parsons said:

"Whilst we are mindful of the current economic uncertainty facing the UK, our simple, stylish and highly affordable customer proposition resonates well with today's cost-conscious traveller and has underpinned strong Revpar growth over the period.

"The team has worked hard to deliver on an ambitious opening programme across the UK and Europe, which has seen the number of owned hotels in our portfolio double over the course of the financial year and our network of rooms across the UK and Europe increase by 42 per cent."

"The successful placing completed in March 2018 has enabled us to accelerate our growth plans. We are focussed on expanding our developments as well as balancing our strong UK pipeline with a growing number of exciting European opportunities, creating value for our shareholders and underpinning the long-term growth of the brand."