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Budget operators aim for separate markets

16 March 2006
Budget operators aim for separate markets

Diversification and brand proliferation are set to revolutionise the budget hotel sector, according to new entrants.

Recent newcomers, such as EasyHotels and Yotel, will transform the sector by offering customers vastly different options.

While EasyHotel will offer guests maximum economy with absolutely no frills, similar to the low-cost airline model, its latest rival, Yotel, will target customers wanting higher service standards, but still at affordable prices.

Speaking at the International Hotel Investment Forum in Berlin last week, Stelios Haji-Ioannou, non-executive chairman of EasyGroup, said his product was firmly aimed at customers spending their own money in urban areas and not claiming room bills through expenses.

"We target customers paying out of their own pockets, so we give them the choice as to whether they want to pay to watch TV or pay to have their room cleaned."

But Gerard Greene, chief executive of Yotel, disagreed with the no-frills approach. "It may be old-fashioned, but I thought we were operating in the hospitality industry.

"I think that customers who pay their own expenses still want their own TV, but also luxury soap and sheets, if it's affordable."

He said that Yotel aimed to offer a business-class service. It would not be reducing staff, but actually redeploying them from areas such as reception to work more effectively on the hotel floors.

"We will be using technology to automate check-ins and use the staff to work on the hotel floors to help improve the service standards."

The group aims to have a hotel at every major airport and city centre in the world and plans to open its first property at Heathrow Terminal 4 later this year.

EasyGroup now has two operating hotels, which opened last year in London and Basel, in Switzerland. The London hotel has 34 rooms, achieving an average room rate of £35 and is running at nearly full occupancy.

By James Garner

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