Conditional acquisition of a site for the development of 109-bedroom in Chester
The Board of easyHotel plc, the owner, developer and operator of super budget hotels, today issues the following trading update for the six months ended 31 March 2018 (the “period”).
The Group has continued to significantly outperform the budget market over the course of the period.
Total system sales up 33.6% to £16.10m (31 March 2017: £12.05m)
Owned hotels Revpar up 11.2% to £36.60 (31 March 2017: £32.90), and have outperformed their competitive set by 11.7% (source: STR Global)
Like-for-like revenue for franchised hotels increased by 13.5%
This strong performance reflects the continued impact of easyHotel’s new booking engine and yield management systems, the growing strength of the easyHotel brand and continued expansion of the network of hotels in key UK and European destinations.
New Hotel Openings
The period saw the opening of a new owned 78-room hotel in Liverpool and the acquisition and opening of a 104-room leased hotel in Newcastle. Both hotels have traded strongly, in line with the performance trend of the hotels opened during the last financial year.
The Group also expanded its franchise portfolio with the opening of the 87-bedroom easyHotel The Hague, Scheveningen Beach in March 2018.
These openings increase the Group’s footprint to 2,430 rooms across 27 hotels in 18 Cities.
Owned Hotel Refurbishment
The £1.5m refurbishment of the Group’s hotels in Croydon and Glasgow was completed in March, bringing both hotels into line with the new easyHotel brand look.
As previously announced, the Board plans to retain a 92-room hotel at Old Street, refurbishing it in line with the new brand format. Planning permission is being sought to add an additional floor to the building and increase the Net Internal Area of the building, for use as office accommodation, which should maximise value from this freehold property.
Conditional acquisition of a site for development of a hotel in Chester
Today easyHotel announces that it has agreed to acquire the freehold of a central site in the historical city of Chester for the development of a new-build 109-bedroom hotel. The acquisition is subject to planning permission.
Located on Forest Street, the site is ideally situated just 500 meters from Chester railway station and close to the centre of this historic walled city. A popular tourist destination, Chester is well known for its well preserved Roman forts, walls and amphitheatre with a number of major leisure attractions nearby including Chester zoo, Chester race course, Chester castle and Tatton park. The City is a busy shopping destination with a thriving business park, well-known as a specialist hub for financial services and biotech businesses.
The brownfield site will be developed into a purpose-built hotel that is expected to open in 2019. The hotel is being delivered to easyHotel as a turnkey development and the total expected cost for acquisition and construction is approximately £7 million.
Owned Hotel Development Pipeline
Since 1 October 2017 the Group added a further 453 rooms to its owned hotel development pipeline with plans for new hotels in Cardiff, Milton Keynes, Cambridge and Chester. All four hotels are anticipated to open in 2019.
Other new hotel projects currently under construction include Leeds (93 rooms), Sheffield (131 rooms), Ipswich (89 rooms) and Barcelona (204 rooms), which are all expected to open this calendar year.
Franchised Hotel Development Pipeline
In November 2017 the Group announced a further two franchised hotels (162 rooms) under development in The Hague, Scheveningen Beach (which opened in March 2018) and Maastricht (scheduled to open in the second half of 2018). In March 2018 the Group also announced that it had signed an agreement for the development of a 146-room hotel in Malaga, Spain.
Other new franchise hotels currently under construction include Lisbon (101 rooms), Bernkastel-Kues (100 room hotel), Belfast (81 rooms), Reading (54 rooms) and Bur Dubai (300 rooms) which are all planned to open this calendar year.
The Group also has hotels under development in Istanbul (300 rooms), Iran (500 rooms) and Sri Lanka (200 rooms) beyond 2018 which will, on completion, enhance its position as the super budget hotel brand of scale in the UK, Europe and Middle East.
Successful Placing of £50m
On 22 February 2018 the Group announced a placing of new ordinary shares to raise £50m (before expenses). The proceeds of the placing will primarily be used to fund the acceleration of the Group’s owned hotel development pipeline. Since completion of the placing, the Group has already announced the acquisition of a 100-bedroom leased hotel in Cambridge and a 109-bedroom owned hotel in Chester, its first two sites to be funded by the proceeds.
Commenting, Guy Parsons, CEO of easyHotel plc, said:
“easyHotel has traded strongly over the first half of the financial year, outperforming the wider market in both our owned and franchised hotels.
“We are mindful that consumers in the UK will continue to be cautious, given the wider macro-economic and political uncertainty, but believe our super budget offer positions us well, as consumers become increasingly discerning and value conscious.
“We continue to make good progress with our growth strategy. The Chester transaction marks our second investment following the successful fundraising announced in February 2018, taking easyHotel’s pipeline of owned and leased development projects to 1,150 rooms, in addition to the 1,857 franchise rooms currently under development.
“The proceeds from our successful fundraising will enable us to accelerate our growth and take advantage of the significant opportunities within our markets, creating shareholder value and underpinning the long-term growth of the easyHotel brand.”
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