Hotel operator is trading ahead of expectations due to owned hotel's 19% LFL rev growth
Companies: Easyhotel
Low-cost hotel operator EasyHotel told investors on Friday that its trading performance in the five months to the end of February was above the board's expectation following its revised revenue strategy announced in December. In further positive news, the chain's owned hotels "materially" outperformed its franchises.
This performance was reportedly driven by solid owned hotel 19% like-for-like revenue growth compared to the first 5 months of last financial year, and overall growth in the UK hotel market during the past year.
EasyHotel opened three "new look" hotels during the period, in Brussels, Amsterdam, and Birmingham, with all trading "exceptionally" strongly and expected to reach maturity ahead of forecast.
The group has 204 rooms under construction in Barcelona, and 94 in Ipswich, and new hotels in Manchester and Liverpool are expected to open during the summer.
CEO Guy Parsons said the firm was on track to open 8 new hotels (4 owned, 4 franchised) during the year and that the Board was evaluating "a number" of opportunities for new sites:
"The Board remains confident that it shall secure properties in major and regional UK cities as well as key European gateway cities whilst leveraging the strong brand to increase easyHotel's presence in the growing branded super budget hotel segment."
Shares in EasyHotel rose 2.6% on Friday, and have enjoyed a small rally of nearly 8% in March. The firm is forecasting a doubling of revenue between 2016-18, and at a P/E of 61.4 forward earnings, investors are clearly expecting a lot from the operator.