Jet setting: Noella Pio Kivlehan reports on a new look for ultra-budget hotel chain easyHotels, which has big ambitions to grow
“Brought to you from Stelios, the serial entrepreneur,” announces the easyHotel web site about easyGroup and the larger-than-life owner of the more famous easyJet. Such fanfare is perhaps more suited to the opening of a Hollywood film than to an unglamorous three-year-old budget hotel chain.
But the association with Stelios Haji-Ioannou is inevitable; after all, he is the credited mastermind behind 16 “easy” options, which include easyMoney, easyPizza, easyCars and easyOffices. Even so, easyHotel chief executive Lawrence Alexander would like it to be known that easyHotel is very much a company of its own, especially when it comes to associations with easy’s best-known brand, easyJet. He says: “If the brand succeeds, I don’t want to be beholden to another brand for any success, because if we float the business [I want] it to be two separate businesses.”
Alexander, whose CV includes a spell as commercial director of Jarvis Hotels, is fairly open about what his company is doing and his plans to take the chain worldwide. He is more than willing to admit that one of the main things about the hotel that has to be changed is its rooms.
“Everyone starts with a design, but we had it the other way round,” he admits. “The rooms that we have seen lack any design.” This could be seen as a gargantuan understatement. For market commentators, easyHotel’s rooms are considered among the worst in the hotel trade. Yes, they are small – roughly 8ft by 12ft – but it is not their size that matters, it is the fact that they are dominated by large orange panels. As one market wit put it: “I’d end up killing myself if I had to stay in a room with so much orange.”
Meeting clients’ wishes
Alexander says that it is time to launch new room designs. “We need to listen to the customers, and what they want,” he says. The rooms are being classified as vs1 (version one) or vs2 (version two) room designs, with vs1 being “no design”.
The main difference, in Alexander’s words, is that: “The original concept lacked design cohesion, so the new design has softer colourways, less orange in the room, replaced by highlighting key ‘brand definers’ in orange.
“The vs2 room design incorporates facilities that easyHotel customers have noted as ‘nice to have’ such as in-room luggage storage a mirror unit with a power outlet a hanging solution ‘odds and ends’ storage by the bed and a nightlight,” he says.
But this change is only being brought in for new hotels only. “We will not mandate refurbishment to existing rooms, as they already have strong customer acceptance,” Alexander says. “However, most of the franchisees will adopt some of the new features into existing rooms.” The first new look hotel to open will be at London’s Heathrow this autumn.
Expansion is a core goal for easyHotel over the next few years, and it will be done on a franchise basis – with good reason, says Alexander. “We have ambitions to be a global brand,” he says, “which means that, in order to understand local territories, operators, be they in the Middle East or India, will teach us how they work.”
He says that franchising is the chosen option because: “Stelios has rather gone off property,” after being left with leases following the demise of the easyInternet chain. It hit troubled waters four years ago, when sites were closed, although easyInternet has since begun to grow again.
Alexander adds: “Opco-propco is now standard in the industry.”
In December, it was reported that easyHotel had signed a £50m agreement with Splendid Hotel Group for the development of 10 easyHotels across the UK during the next three years, to add to the six already in operation. One will open in Luton this month, another at Heathrow by June and another at Paddington, London, in September, to be followed by Reading and Stratford East. A former office block has been acquired in London’s Waterloo, but planning permission has yet to be granted.
In Europe there are plans to open as many as 70 easyHotels, “but these will take time to come through,” says Alexander, who has no timescale in mind for their openings. However, he admits to having signed for 10 hotels in Berlin. The chain is already present in Budapest, Hungary, and Zurich, Switzerland.
Dubai is to have four easyHotels, which will offer larger rooms than those in the UK, at 15.5 m². India is also on the company’s radar, as is Brazil, which is expected to get the go-ahead soon for its first easyHotel.
Although Alexander has described specific plans for growth, he says he would “rather talk about reality than a wish list”.
Staying power
And what of the credit crunch – how will that affect proposed openings? “We have been talking to our franchisees, and we have been talking to Barclays and the Royal Bank of Scotland,” Alexander says. “They have not changed their views because they believe there is money out there, and most of the franchisees have good track records and histories.”
One thing that will change, he believes, is the loan-to-value ratio, which will not be as high as previously. “We won’t sign anyone as a franchisee who has borrowed more than 80%,” he says.
New openings, however, will not have a food and beverage offer. Alexander says this is why the company looks for sites in areas that are “close to animation”. He says: “You need to be able to walk from the hotel and find bars, cafés and retail.” Dubai will be the only exception. “In Dubai,” he says, “there will be a food and beverage outlet, as it is not possible to ‘walk around the corner’ to Starbucks.”
The market still feels this policy is something of a drawback for the group, however. While seeing the overall brand as a good example of so-called “cabin hotels”, Philip Camble, director at Cushman & Wakefield Hospitality, highlights some problems.
“In the right environment,” he says, “they can exploit certain types of buildings such as basements, but they ask the customer to do too much.”
Alexander concedes: “OK, easyHotel is not for everyone,” when asked why customers would choose it over other brands in the budget sector that do offer additional facilities. “But, our competition is not Travel Inn or Travelodge – it’s the one- and two-star premises, or B&Bs.”
With its expansion plans, however, it looks as though easyHotel will be carving out its own path, way beyond that of its competitors.
