Easyhotel struggles in the face of weakening consumer confidence
Super-budget hotel firm Easyhotel shares fell this morning as it reported dampening consumer confidence, with no improvement in sight.
The London-listed firm said that despite political uncertainty that has blighted the industry in recent months, it had outperformed the UK hotel market over the last year.
Read more: Stelios urges investors to reject Icamap’s £139m Easyhotel bid
Easyhotel enjoyed a 28 per cent rise in sales to £47.8m, while revenue rose a whopping 56 per cent to £17.6m for the 12 months ending 30 September.
Shares were down 4.9 per cent in early trading.
But chief executive Guy Parsons was downbeat. He said: “The hotel markets have remained challenging in the second half of the financial year, particularly in the UK where we are seeing dampened consumer confidence.
“Whilst our owned hotels have continued to outperform the market, we have not been immune to the weaker regional hotel market and trading across our franchised portfolio has continued to be subdued.
He added that directors at the firm “don’t foresee any improvement to the trading environment in the medium term”.
Easyhotel runs hotels across western Europe, and has one location in Dubai. The majority of its locations are in the UK.
It was subject to a takeover by real estate investors Ivanhoe Cambridge and Icamap over the summer, despite protests from founder Sir Stelios Haji-Ioannou, who said their £139m offer undervalued the company.
The firm markets itself as “super budget,” with simple, box rooms on offer from anywhere between £16 and £50, depending on the location.
Read more: Easyhotel sees sales rise but warns of lower margins in the year ahead
Although the London market has continued to perform strongly, with revenue per available room growing 4.5 per cent, the regional UK market’s revenue per available room has remained weak, it said, down 2.8 per cent.
Parsons added: “We are focused on our strategic priorities and believe the current economic uncertainties will present attractive investment opportunities to continue to expand our development pipeline in our target destinations, underpinning the long-term growth of the brand.”