Strategy
Strategy at the heart of our business model
Our Board believes that our stated strategy continues to be the best way to achieve the Group’s growth targets.
Customer understanding
- Budget hotels are chosen because of location and price – consumers choose them because they’re close to where they need to be.
- Customer needs are relatively simple: a great bed, well-trained, friendly staff and well-designed rooms.
- A brand that is easy and simple to do business with.
A market opportunity
- The significant independent sector is in structural decline.
- The branded budget sector has grown faster than any other sector in the UK hotel industry for the last 30 years, and is forecast to continue doing so.
- easyHotel can steal market share from other operators, creating a medium-term opportunity to open 8,000 owned rooms and 4,000 franchised rooms in the UK, 4,000 owned rooms in Europe and 11,000 franchised rooms opportunities in Europe.
- Further opportunities exist in Africa, the Far East, Australasia and North, South and Central America.
Maximising revenues
- We don’t have restaurants in our hotels – we use every available space to sell bedrooms.
- We offer a consistent, good quality room at a low price. As a result, our occupancies are high.
- Revenues are maximised via the revenue management and eCommerce strategy.
Delivering shareholder returns
- Our operating margins are high. We outsource our cleaning to specialists and keep our staffing levels to a minimum.
- We use a combination of owned and franchised hotels. Franchised hotels build a brand presence without the need for capital investment, deliver a high incremental margin and increase Group ROCE.
- The Group adopts strict investment criteria for owned hotel development (including leased hotels) that will contribute towards the Group ROCE target of 15%.
- With a strategy to dispose of non-core assets in place, maximising the capital available to build bedrooms.