easyHotel to deliver 2017 results in line with expectations
The UK’s leading super budget chain easyHotel will report a successful 2017 as new hotel openings boost bookings and sales.
New Hotel Openings
During the period we opened five new owned hotels (610 rooms) in Liverpool, Newcastle, Leeds, Sheffield and Barcelona, our first owned hotel in Europe. These hotels have performed particularly well, mirroring the strong performance of our Birmingham and Manchester hotels opened last year.
The Group continued to expand its franchise portfolio opening four new hotels (297 rooms) in Belfast, Reading, Scheveningen Beach and Maastricht.
These combined openings significantly increased the Group’s portfolio room count by 42%, bringing the total network to 33 hotels and 3,068 rooms across 27 cities.
Owned Hotel Refurbishment
The Group has also refurbished its Croydon and Glasgow hotels to bring them in line with the new brand format. This investment has been immediately earnings enhancing.
As previously announced, the Group will also be undertaking a full refurbishment of its property at 80 Old Street. The Board has taken the decision to shut the entire building from December 2018 instead of a rolling refurbishment programme and expects to re-open the building as a 89-bedroom hotel and 15,500 sq ft of office accommodation in the second half of 2019. The total cost for the development is expected to be approximately £7m and the Board is confident that this investment will maximise the value from the property for the long-term benefit of shareholders.
Owned Hotel Development Pipeline
The Group has added a further 686 rooms to its development pipeline over the course of the period with plans for new hotels in Milton Keynes, Cardiff, Chester, Cambridge, Dublin and Blackpool.
As at 30 September 2018 the Group’s total owned hotel development pipeline comprised 955 rooms.
Franchised Hotel Development Pipeline
In addition to the four recently opened franchised hotels mentioned above, the Group has also signed new franchise agreements to develop a further seven hotels in Switzerland (Zurich, 4 hotels, and Basel), Spain (Malaga) and the Netherlands, where the Group is pleased to announce the development of a new 154-bedroom franchised hotel at Amsterdam Schiphol Airport, the main international airport in the Netherlands. This is the group’s 9th hotel in the Benelux region (its second biggest market after the UK) and the hotel is anticipated to open in 2019.
As at 30 September 2018 the Group’s total franchised hotel development pipeline comprised 1,975 rooms.
European Development opportunity
2018 has seen the Group open its first owned hotel in Continental Europe in Barcelona Spain, building on the strong performance already established by its franchise network across Europe. The Board believes that Europe holds a number of attractive opportunities for the brand and intends to balance its development pipeline more evenly between UK and Continental Europe and it will accelerate its presence in these markets.
The Group will initially focus on Spain, France and Germany, where the Board believes there is potential for the brand to target 10 to 15 cities in each of these three countries. A dedicated team has been appointed to lead the expansion under Group Development Director Marc Vieilledent and the Group believes that the additional Continental European hotels which this team is targeting to deliver should be significantly earnings enhancing from 2021.
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