Stansted to get its first budget hotel

A 250-bedroom Holiday Inn Express hotel is to be built at Stansted Airport in Essex under a deal signed this week.

It will be the first budget hotel at the airport, now the fourth largest in the UK in terms of passenger numbers.

The hotel will be built and run by Kew Green Hotels, which is taking a 125-year lease and investing about £9m in the development. It will include a restaurant, bar and business facilities.

Construction will start once detailed planning permission has been obtained. The initial phase will see 175 bedrooms constructed, with a further 75 added in a second phase. The hotel is expected to open in early 2004.

At the moment, the airport has only one hotel, the Stansted Hilton, which was built 15 years ago and has 240 bedrooms.

Planning consent was also obtained in June for a four-star, 500-bedroom Radisson SAS hotels with direct pedestrian access to the airport. That hotel is expected to open in mid-2004.

Kew Green Hotels runs budget hotels under the Express by Holiday Inn and Days Inn brand names.

It is building two Days Inns at Wakefield and Derby and two Holiday Inn Express hotels at Portsmouth and Nottingham, all due to open in 2003.

Kew Green's main backers are investment company the Moorfield Group and the Bank of Scotland. Most of the funding for the Express by Holiday Inn Stansted will come from financiers Close Brothers.

Kew Green struck the deal with BAA Lynton, the commercial property development arm of airport group BAA Lynton.

Dominic Murray, associate director at advisors Insignia Hotels, which acted for BAA Lynton, said: "There was strong competition to win this deal. We see no market concerns over well-located, quality developments where the hotel product is well-matched to the market's needs."

About 15.3 million visitors passed through Stansted in the year to 30 September.