easyHotel plans European expansion with £11m share funding

March 9, 2020

EasyHotel – A hotel franchise has announced that it is aiming to raise £11m for its brand growth and international roll-out.

EasyHotel, which owns, develops and operates ‘super budget’ hotels, said that it will be issuing more than 11 million subscription shares to Citrus Holdco at a price of 95 pence per share.

The proceeds of the subscription shares will go towards the company’s owned hotel roll-out strategy.

The company also announced an investment in Spain recently as part of its European expansion strategy.

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Scott Christie, interim CEO of easyHotel, commented: “Our recently announced investment in Spain marks the latest step in our strategy to expand our owned hotel network across centrally located, high quality sites in major European cities.

“The Group continues to make good progress towards securing sites in its target destinations and we look forward to announcing further developments in due course.”

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Harm Meijer, non-executive chairman, commented: “Citrus Holdco Limited confirmed at the time of its offer for easyHotel’s shares last year that it was committed to supporting easyHotel to achieve the board’s strategic vision for the business more quickly and effectively.

“The proceeds from this proposed subscription will provide the business with the capital it needs to pursue the next stage of its owned hotel roll-out strategy.

“We are excited about the development pipeline and, in particular, the potential for accelerating our targeted growth of the brand in Europe.”

By Chloe Shakesby

Source: BDaily

Budget hotel operator EasyHotel to open Dublin property next year

January 30, 2020

Budget hotel operator EasyHotel is targeting a 2021 opening date for its first property in the Republic.

Currently, the company’s only presence in Ireland is its one hotel in Belfast, which is run on a franchise basis.

A long-since planned opening in Dublin is now set for the second half of 2021 and further Irish openings have not been ruled out.

The company acquired a freehold site in the Smithfield area of Dublin City nearly two years ago. Planning permission initially allowed for a 96-bedroom hotel, but the company is now targeting a 160-bedroom property.

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The Dublin hotel will be owned and operated by the company, rather than via a franchise partner.

While further Irish openings have not been ruled out, EasyHotel’s immediate expansion focus is on UK cities and mainland Europe, particularly France and Spain.

EasyHotel is still listed on the London Stock Exchange, but is now majority-owned by a consortium including property investor Ivanhoé Cambridge and Luxembourg-based property fund manager ICAMAP Investments, as opposed to EasyJet and EasyGroup founder Stelios Haji-Ioannou.

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Speaking on the back of a mixed set of annual results, EasyHotel’s interim chief executive Scott Christie said management is excited by its development pipeline and the potential for the brand in Europe.

The company reported a 56% jump in revenues — to £17.6m (€20.8m) — for the year to the end of September, but also incurred a pre-tax loss of £3.57m, compared to a profit of £870,000 12 months prior.

By Geoff Percival

Source: Irish Examiner

EasyHotel looks to Europe with new CEO

January 11, 2020

EasyHotel has appointed François Bacchetta as CEO, replacing Guy Parsons, who left the company in November.

Baccetta joins the super-budget hotel brand from sister company easyJet, where he was country director for France and Italy, and is expected to drive the flag’s growth in Europe.

Bacchetta was at easyJet for 15 years, having previously held a number of senior marketing positions at global cosmetics group L’Oréal, including responsibility for territories in South East Asia, as well as Europe.

Harm Meijer, non-executive chairman, easyHotel, said: “Following a comprehensive search, we are pleased that François is joining us to lead easyHotel in its aspiration to become a European leader in the super-budget hotel segment. He knows the easy brand and understands its values extremely well. He also brings a wealth of experience in developing businesses, strategy, business optimisation, leadership, marketing and revenue management.”

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Bacchetta said: “easyHotel is a business I greatly admire and I am thrilled to be appointed. With a strong hotel network established in the UK, I believe this is a very exciting time for the brand and I look forward to leading the expansion in Europe as the group seeks to become a leader in the budget hotel space.”

October last year saw a consortium of Ivanhoé Cambridge, a real estate subsidiary of Caisse de dépôt et placement du Québec, and ICAMAP, a real estate fund manager, announce that they now controlled 68.8% of easyHotel.

With 27.9% of easyHotel’s share capital held by easyGroup, the private investment vehicle of Sir Stelios Haji-Ioannou, the creator and owner of the ‘easy’ family of brands, this left a balance of 3.4% minority shareholders.

Sir Stelios had previously objected to the takeover move, describing it as “very low”. Once the deal was declared unconditional, he called on ICAMAP/Ivanhoe to replace “all the directors, whose advice to shareholders to accept the undervalued offer at 95p was plainly wrong”.

He added: “While I applaud the ICAMAP/Ivanhoe’s huge vote of confidence in easyHotel – I must repeat my insistence that it remains a listed company on the London market. It’s now clear that easyGroup’s 28% blocking minority stake and ICAMAP’s low ball offer has made it impossible for easyHotel to be taken private. Therefore this exercise was an object lesson in pointlessness. By taking their stake from 38% to 68%, ICAMAP have achieved little other than to enrich lawyers and bankers to the tune of £1.5m. What a colossal waste of money!

“But we are where we are. We will need to lay out a roadmap for further equity raisings in what is now Europe’s fastest-growing super-budget hotel chain to make it the success it surely deserves to be.”

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Sir Stelios had previously attempted to buy up shares to take his stake to just below the 30% threshold at which takeover rules would require him to make a bid for the whole company.

The 95p per share offer valued EasyHotel’s equity at £138.7m on a fully diluted basis and implied a multiple of 36.7 times the growing company’s Ebitda of £3.4m for the 12 months ended 31 March 2019.

The pair said that the company needed “significant investment” to fulfil its potential, with a move towards more franchising within the UK widely expected.

EasyHotel’s 12 owned hotels comprised 1,340 rooms, and it had a further 26 franchised hotels with 2,293 rooms. EasyHotel’s committed development pipeline of owned and franchised hotels currently consists of nine owned hotels and eight franchised hotels.

Karim Habra, head of Europe, Ivanhoé Cambridge, said: “This investment perfectly illustrates our innovative value-creation strategies through a complex operation. The easyHotel concept is pioneering and visionary. It is already a strong brand and we believe in its growth potential on a pan-European scale at a time when mass tourism is growing rapidly every year.”

Guillaume Poitrinal and Meijer, founding partners of ICAMAP, said: “Following the very strong level of acceptances of the offer, we look forward to working with easyGroup and the other shareholders to grow and expand the business and help easyHotel realise its full potential.”

Insight: Guy Parsons’ exit at the end of last year was a shock to many, given the hand he’d had in steering the brand towards growth after a lackadaisical start which saw guests paying for clean sheets and a far-from-rapid rollout. But new owners – or majority owners at least – so a new CEO.

Baccetta is the latest in a series of executives to come into the sector from that mythical place known as Elsewhere, where so few hotel CEOs originate. The budget segment has developed a taste for them, however, with Premier Inn having acquired Alison Brittain from – whisper it – retail banking in 2015.

The attraction for Whitbread at the time was Brittain’s experience on the high street rather than in hotels and almost five years later she has served longer than many a hotel CEO and, despite ongoing rumblings from activist shareholders, the brand remains intact and determined to grow in Europe, with Germany at the forefront.

But away from how Whitbread should use its Costa proceeds to pay for that and back to Europe and the new incumbent at easyHotel. The association with easyJet was always seen as key to easyHotel’s success, not least because the brand’s expansion overseas tended to link to the routes of the airline. Value for money joined the two in the mind of the consumer and in the mind of the owner, as easyHotel felt that it owned as much as it need to in the UK – onwards to franchising.

In mainland Europe there was still an appetite for ownership as it looked to key locations and here the new CEO will be eager for the new owners to come good on their plans to realise the group’s potential and dig deep. With budget competition in Europe growing – and OYO lurking – expect the first fundraising sooner rather than later.

By Katherine Doggrell

Source: Hotel Management

EasyHotel makes development progress in three markets

October 27, 2019

Super budget hotel developer and operator easyHotel updated the market on its developments on Wednesday, reporting that at its owned hotel at Paris Charles de Gaulle Airport in France, planning permission for the 209-room property had now been granted.

The AIM-traded company said it had secured an operating lease agreement with airport management company Groupe ADP, with the hotel to be let on a 24-year fully repairing and insuring lease at an annual rent of approximately €1.1m.

It said the site was being developed by Linkcity Ile de France – a subsidiary of Bouygues Construction – and construction works would now begin “imminently”, with the new hotel expected to open during the 2021 financial year.

Looking at its franchised hotel development pipeline, in Derby the company confirmed that it had signed a franchise agreement with Ushba for the development of a new 110-room hotel.

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Located close to the city centre and main transport hubs of the city, the hotel was expected to open in 2021.

In Tel Aviv, Israel, easyHotel said it had signed a 20-year exclusive franchise agreement with R&N Services to support the brand’s development in the city.

The agreement included the development of three initial hotels in prime locations across Tel Aviv, totalling 667 rooms.

It added that the hotels were expected to open by late 2022.

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“I am pleased to report further progress against our strategy as we continue to expand our network of super budget hotels in city-centre locations, both in the UK and across international markets,” said chief executive officer Guy Parsons.

“The board believes that the current economic uncertainties will continue to present attractive investment opportunities for the brand and we look forward to announcing further updates in due course.”

By Josh White

Source: ShareCast

easyHotel To Review Dividend Policy As Hotels Outperform UK Market

October 20, 2019

easyHotel PLC on Friday said it will consider its dividend policy amid challenging trading conditions which are not expected to improve over the medium-term.

The stock was trading 11% higher in London on Friday in early trade at 110.00 pence a share.

The super-budget hotel chain said total system sales were up 28% in the year to the end of September to GBP47.8 million from GBP37.3 million reported a year ago.

easyHotel highlighted that despite the ongoing political and economic uncertainty facing the UK, owned hotels have continued to outperform the UK hotel market on a like-for-like basis.

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easyHotel’s owned hotels like-for-like revenue per available room was up 7.7%, but franchise like-for-like RevPar down 1.6% over its most recent financial year.

“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,” said Chief Executive Guy Parsons.

The AIM-listed company reported revenue growth of 56% to GBP17.6 million from GBP11.3 million year-on-year.

easyHotel said it has maintained a “tight” control of costs, but against the challenging trading environment it anticipates adjusted earnings before interest, taxes, depreciation, and amortization closer to GBP4.6 million for the year ended September 30. In comparison, last year, the UK-based company’s adjusted Ebitda totalled GBP3.0 million.

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In addition, easyHotel’s current dividend policy will be reviewed prior to the publication of annual results. The company will consider ending the dividend as it looks to grow its current hotel estate.

“Whilst we don’t foresee any improvement to the trading environment in the medium term, 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,” added Parsons.

By Evelina Grecenko

Source: Morningstar

EasyHotel eyes council link ups for new sites

September 17, 2019

easyHotel has revealed it is in discussions with local authorities across the country with a view to establishing hotels in council buildings which are not fully utilised.

St John Harvey, franchise development director at easyHotel, told Insider that the brand had held positive discussion with a number of councils.

With easyHotel’s business model providing the flexibility to take over part of a building, the initiative provides councils with the opportunity to make a return from an asset that was otherwise redundant.

“Since the financial crash of 2007/2008 the public sector has contracted and we suspect they have buildings that are either partly occupied or vacant and are located in absolutely the right position for an easyHotel,” said Harvey.

The easyHotel brand typically targets a demographic of travellers aged between 18 and 40 with a simple product, which is compact but clean and comfortable.

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Hotels are located right in the centre of a city or town, no more than a five-minute walk from food and beverage and ten to 15 minutes’ walk from the nearest bus station or main train station.

“The public sector estate typically has plenty of buildings that meet that criteria that might not be fully utilised,” said Harvey.

“We’ve started to reach out to local authorities, to the district boroughs and unitary authorities and in due course we’ll start talking to the NHS as well, because I think they would fall into this category, and to see what they have available.”

So far discussions, with local authorities across the UK, have proved to be “very encouraging”, Harvey said, adding that the idea “resonates”.

As easyHotel does not require exclusive use of a building, a hotel could be established in a council property which houses, for instance, a library on the ground floor but is otherwise vacant.

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“It’s a really flexible model which allows councils to get as much or as little involved as they want, but ultimately has a great civic message,” said Harvey.

“We are driving business to the town centre, we are stimulating local firms because we’re not competing with bars and restaurants, and we are attracting people to visit the town.

He added: “Here’s a building that may be an eyesore or threatened with closure but no longer needs to face that fate.”

By Laurence Kilgannon

Source: Insider Media

EasyHotel boss backs British market despite Brexit fears

July 21, 2019

The boss of easyHotel has said the UK is still a “great place to do business” despite Brexit uncertainty hitting the hospitality sector, as the budget chain reopens its flagship London site.

Speaking to PA at the official opening of easyHotel Old Street, chief executive Guy Parsons said his company would continue to invest in Britain as it targets 25 sites around the country.

“Our performance is strong but we’re very mindful of what’s taking place in he wider economy and the impact it could have on our business,” he said.

“Fundamentally I still think the UK economy is going to be strong, it will still be a good place to do business in.”

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Commenting on the impact of Brexit, he said both consumers and businesses had slowed spending due to a lack of clarity.

“The hotel industry relies on confidence,” he said.

“Businesses need certainty and until we know what’s going to happen at the end of October, people are more likely to have a wait and see approach.”

His comments came as the 89-room Old Street branch opened its doors again following an extensive renovation. The no-frills accommodation starts at £49.99 a night.

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Mr Parsons told PA there was room for as many as 25 sites in the UK. The brand currently has 11 owned sites in the UK and six through franchise agreements.

He said most of the expansion would be achieved through franchise agreements, but that the company was eyeing up Bath, York and Edinburgh as locations for owned hotels.

By Alys Key, PA City Reporter

Source: Yahoo Finance UK

Easyhotel to expand in EMEA and make Asia debut

June 3, 2019

Easyhotel says it is set to grow its portfolio by almost 20 properties over the coming years, as the budget brand announced raised revenues but a fall in profit.

There are currently 36 Easyhotels across various European cities.

Its development pipeline of owned hotels now includes properties in Milton Keynes, Chester, Cardiff, Oxford, Blackpool, Cambridge, Bristol, Dublin and Paris’s Charles de Gaulle Airport. All are set to open over the next 24 months – see all the expected opening years here.

Franchise hotels are also due in Malaga, Zurich, Basel, Amsterdam Schipol Airport, Dubai and – in firsts for the brand – Iran, Turkey (Istanbul) and Sri Lanka, marking its first Asian property.

Easyhotel this week announced that in the six months to March 31, revenue hit £7.26m, compared to £4.76m year-on-year. However it saw a pre-tax loss of £120,000 over the period, down on a £90,000 profit.

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The company blamed the temporary closure of its Old Street property and higher depreciation from new hotels for the fall in profit.

Easyhotel CEO Guy Parsons commented: “Easyhotel has delivered a market outperformance and good profitable growth in the first half of the year against a challenging market.

“Over the course of the last two years we have added a total of 18 hotels to our portfolio, significantly expanding our network in key business and tourist destinations across the UK and Europe.

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“Our most recent openings have not only traded in line with our expectations but have also tracked the good performance seen from our new hotels opened in the prior year, which in the current trading environment is very encouraging.

“Our UK network of owned hotels is already well established, with a strong opening programme in place for the next two years. The Group is now focused on replicating this success across Europe.”

By Jenni Reid

Source: Business Traveller

easyHotel celebrates ‘transformational year’ with 34% revenue growth

December 8, 2018

easyHotel has celebrated a “transformational year” that saw total sales increase by more than 25% and revenue by more than 30%.

The year to 30 September 2018 saw the super budget hotel group’s total system sales increase from £29.7m to £37.3m, while revenue increased to £11.3m, compared to £8.4m the previous year.

Adjusted EBITDA was at £2.96m up from £2.3m the previous year with the group recording pre-tax profits of £870,000, an increase on 860,000 the previous year.

Profits had been hit by the loss of 70 rooms at easyHotel Old Street and the closure of a 109-bedroom franchise hotel in Earl’s Court.

Revpar among the group’s owned hotels was up 11.4% while like-for-like revenue at franchised hotels increased by 12.1%.

Nine new easyHotels opened during the year totalling 907 rooms, with seven sites in the UK and Ireland in the development pipeline.

Guy Parsons, CEO of easyHotel said: “This has been a transformational year for the group. We have increased our portfolio of rooms by 42%, in 27 cities across the UK, Continental Europe and the Middle East, making excellent progress towards our target of being the market leader in ‘super budget’ hotels.

Related: EasyHotel continues rapid expansion with Yorkshire double opening

“Despite the wider macro-economic uncertainty that continues to impact consumer confidence, particularly in the UK, we have grown market share for the third consecutive year. The continued outperformance of our hotels reflects the growing strength of the easyHotel brand. Our simple, stylish but highly affordable offer resonates exceptionally well with today’s cost-conscious traveller, giving us confidence to continue developing owned hotels.

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“The successful placing completed in March 2018 has allowed us to accelerate our growth plans further, in line with our strict investment criteria. We see a number of exciting opportunities for the brand, not only in the UK but increasingly in Europe where we have recently opened our first owned European hotel in Barcelona. We have added a further 1,160 rooms to our development pipeline over the course of the year and invested behind our team to expand our presence in Europe, where we believe there is significant opportunity for the brand, particularly in Spain, France and Germany.”

Source: The Caterer

EasyHotel continues rapid expansion with Yorkshire double opening

November 7, 2018

EasyHotel has continued its rapid expansion into the UK market with the opening of its first hotels in Yorkshire – one in Leeds and one in Sheffield.

The sites, launched today respectively by the Lord Mayor of Sheffield Magid Magid and the Lord Mayor of Leeds Graham Latty, will seek to offer a budget option to the increasing number of tourists visiting the area.

Combined, the 131-bedroom Sheffield site and the 94-bedroom Leeds site are expected to create 26 jobs.

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Chief executive Guy Parsons said: “Yorkshire has experienced a boom in tourism in recent years and we are delighted to be opening our first two hotels in this popular county.”

Related: easyHotel celebrates ‘transformational year’ with 34% revenue growth

Last month EasyHotel announced it had applied to build a new site in Bristol, and had received planning permission for a further site in Oxford due to launch in 2020.

In total there are currently eight owned hotels in EasyHotel’s pipeline, on top of its seven current owned hotels and four franchise locations in the UK.

Source: The Caterer