The presidential suite is a squeeze for Stelios

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Half-way up a Victorian crescent in amongst the B&Bs, hotels and tourists of London's South Kensington area, the instantly recognisable orange hue of the "easy" brand gleams from the doorway of a white stucco-fronted building.

A struggling guesthouse that had only 20 rooms has become the latest incarnation of the Stelios Haji-Ioannou's easy empire.

It is the first easyHotel and yesterday was its opening day.

The original 20 rooms have been ripped out and 34 have been squeezed in, available in three honest sizes - small, very small and tiny - from as little as £20 per night. "Ahh, welcome to the presidential suite," beamed Stelios, barely able to fit his ample frame through the door of the largest room size available.

"You can see I have not been exaggerating the description of the room sizes," he said. The largest is 80 square feet, and the smallest is 60, which is just big enough to fit in a double bed jammed in between three walls. Next to the door is the bathroom, only just able to accommodate a toilet, sink and standing room for a shower, which is almost directly over the basin. Only three of the rooms have windows - guests have to pay extra if they want a room with natural light.

Every room has a flat screen television, which guests can watch for a charge of £5 per 24 hours. During a stay, to have sheets and towels changed, there is an additional £10 charge. Liquid soap is available in a dispenser in the shower room, which is about the only "frill" in the easyHotel experience.

The building was completely gutted, with the wrought iron balustrades all that remains of its original features.

The rooms are covered with orange formica wall panels and cost £20,000 each to convert.

"Our customers will be a short-stay traveller who is paying for their accommodation out of their own pocket, or a business traveller on a tight budget, who does not want anything other than a bed to sleep in," said Stelios. "They want to know the place will be clean and safe, which you can never guarantee with unbranded B&Bs." Room rates work on the same model as for other easy ventures - the earlier they are booked the cheaper they are. He expects the hotel to be around 90 per cent full all year.

Only one member of staff will be on duty at a given time to man the reception. There are no other facilities or services and all bookings must be done over the internet.

The easyGroup owns and operates the first hotel, but Stelios is planning to expand using a franchised model. The first franchise has already been signed up in Basel, Switzerland.

Stelios's easy brand has now spread from airlines to car hire, pizza delivery, music downloads, credit cards, hotels and cruises.