EasyHotel fails to impress despite more than doubling sales

EasyHotel's founder Sir Stelios Haji-Ioannou (Getty)

EasyHotel, the super-budget hotel group set up by easyJet founder Sir Stelios Haji-Ioannou, failed to impress investors yesterday despite boosting sales, as its shares plunged 8 per cent.

EasyHotel, which listed on the junior AIM market last year and boasts windowless rooms among its scaled back attractions, watched shares swing below its listing price for the first time, down 6.5p to 74p.

This was despite revenues jumping 104 per cent to £2.59m, although pre-tax profits only rose 7 per cent to £370,000 in the six months to end of March due to the high start-up costs involved in expanding the business.

The management is focusing on opening more easyHotel-owned hotels, including a new site in Liverpool, which is currently awaiting planning permission, while there was also the successful opening of a site in Croydon recently.

The total number of rooms increased by 12 per cent over the period and occupancy rates in the hotels it owns hit 69 per cent, which the company said was impressive during the off-peak season.

Along with owning its own hotels, the company has also leased out the name in a franchise model across the UK and parts of Europe, although bosses said it could make higher margins through its self-run sites.

Plans are under way to open as many as 150 company-owned hotels, alongside franchises.

But the chairman Jan Astrand will not see the expansion as he has decided to stand down now the IPO has been completed. He will be replaced by Jonathan Lane, another non-executive.

The company was set up by Sir Stelios in an attempt to spread his EasyGroup business interests, however it failed to get the wanted valuation at listing, meaning the businessman remains the majority shareholder with a 55.7 per cent stake, although he has only 49 per cent of the voting rights.