History

easyHotel was founded in 2004 as a “super budget” hotel group, opening its first hotel in South Kensington, London in 2005. The business was founded by Sir Stelios Haji-Ioannou, nine years after his launch of easyJet and four years after easyJet’s IPO on the London Stock Exchange with an equity value of £777 million at that time.

Whilst easyHotel owned its first hotel in South Kensington (which was subsequently sold and franchised in 2007), its primary goal in its early years was to grow via franchise contracts.

easyHotel franchise revenue 2010-2014 (£)

Franchise revenue graph 10 to 14.jpg

easyHotel has been successful in winning new franchise contracts and opening its directly owned hotels, with an estate of 21 operational hotels comprising approximately 1,500 rooms at hotels operated by franchisees and approximately 400 rooms owned by easyHotel.

  • Amsterdam – October 2011
  • Basel – January 2007
  • Berlin – March 2010
  • Budapest – October 2007
  • Den Haag – May 2013
  • Dubai – September 2010
  • Edinburgh – January 2015
  • Frankfurt – January 2015
  • Glasgow – January 2014 (easyHotel owned)
  • London Old St/Barbican – June 2012 (easyHotel owned)
  • London Croydon – November 2014
  • London Earls Court – June 2007
  • London Heathrow – December 2008
  • London Paddington – September 2008
  • London South Kensington – August 2005
  • London Victoria – April 2007
  • London Luton – April 2008
  • Prague – June 2015
  • Rotterdam – September 2013
  • Sofia – January 2010
  • Zurich – November 2007

Over the past year, following the successful opening of easyHotel’s owned hotel in Croydon, London, easyHotel has continued moving its strategy towards investment in freehold owned asset investments. This entailed the purchase by easyHotel of sites in Manchester and Liverpool with expected hotel openings in Autumn 2016.

Whilst easyHotel remains committed to the success of its existing franchisees, its change in strategy now effectively entails owned hotels in major European gateway cities, with its franchising initiatives largely focused outside these areas and outside of Europe.

Relationship with easyGroup

The Directors believe that easyHotel’s relationship with the “easy” brand and easyGroup has been key to easyHotel’s development as an international hotel operator. The Directors consider that easyHotel will be able at all times to act independently of easyGroup and its affiliates in the future and accordingly, aside from the Relationship Agreement, Brand Licence Agreement, the long leasehold of the Croydon building and pursuant to certain historic franchise agreements, upon Admission easyHotel will have no formal links to easyGroup.

Brand Licence Agreement

The Company has a 50 year global Brand Licence Agreement with easyGroup IP for the use of the “easyHotel” brand name. This gives the Company the right to use the brand name “easyHotel” globally for the provision of hotel services. The royalty fees payable under the Brand Licence Agreement are 0.75 per cent. of the Company and its franchisees’ revenue (less VAT). This declines in 0.1 per cent. increments on an accumulated basis as revenue rises, with royalty fees reducing to 0.25 per cent. payable on any amount over £300 million revenue. There is a minimum annual royalty of £100,000 (increasing in accordance with RPI).

Relationship Agreement

On 25 June 2014, the Company entered into the Relationship Agreement with easyGroup. The Relationship Agreement contains, inter alia, provisions to allow the Company to operate independently of easyGroup, provides that all arrangements between it and the Company will be on arm’s length terms and on a normal commercial basis, requires that easyGroup abstain from doing anything which would result in a member of easyHotel not being capable of carrying on independent business, confirms that easyGroup shall not cause the Company to fail or prevent the Company from complying with its AIM and other regulatory obligations, prohibits easyGroup from voting in favour of any resolution to cancel the Company’s admission to AIM, confirms that easyGroup agrees to support and uphold the highest standards of best practice regarding substantial shareholders as required by the London Stock Exchange and the FCA (including the independence provisions set out in the FCA’s UK Listing Rules, as if they were applicable to the Company but with reference to the AIM Rules for Companies). In addition, easyGroup agrees that where it is deemed to be acting in concert with any other Shareholder(s) such that the aggregate shareholding of easyGroup together with such other persons exceeds 49.0 per cent. of the voting rights attaching to the Company's issued share capital, then easyGroup shall (save with the prior written consent of the Company) limit the exercise of the voting rights attaching to the Ordinary Shares held by it to such number of Ordinary Shares that, when aggregated with the number of Ordinary Shares held by the other members of the concert party, does not exceed 49.0 per cent. of the Company's issued share capital. The provisions of this agreement shall cease to have effect if easyGroup’s total interest in securities in the Company falls below 25 per cent. and the share capital of the Company remains admitted to trading on AIM or admitted to the Official List and to trading on the London Stock Exchange.