Heightened brand awareness through online travel agencies helped easyHotel increase sales and revenue over the winter as it outperformed the market in the UK.
Total sales at the self-styled super budget chain rose by 24% to almost £20 million in the six months to March 31, with revenue up 47% to £7 million.
The performance came despite the ongoing political and economic uncertainty facing the UK, the company said in a trading update this morning.
Like-for-like revenue per available room (revpar) at owned hotels grew by 5.4% over the same period a year earlier. However, franchise revpar fell by 3.5%.
Relatively strong market demand in London was off-set by a weaker regional market performance, with a “marked deterioration” in revpar across the UK in the three months from January against the previous quarter.
“As a result the short-term market outlook remains uncertain,” the company said.
European franchised hotels performed “less strongly” than those in the UK, despite European hotel markets generally outperforming the UK.
“Trading is mixed on a country-by-country basis. As in the UK, overall market demand has softened in 2019,” easyHotel added.
“Our hotel in Dubai is trading in-line with the wider market. The imbalance between supply and demand continues to affect revpar.”
Company CEO Guy Parsons said: “Ongoing political and economic uncertainty continues to impact consumer confidence as demonstrated by weakening quarter-on-quarter demand across the market, both in the UK and in Europe.
“However, our actions to drive occupancy, including working closely with online travel agents to increase brand awareness, has meant that easyHotel has continued to outperform its competitors as consumers seek out the best value for money.
“Subject to our continued overall market outperformance as we enter our key trading period and whilst mindful of the ongoing uncertainty, the board expects the outturn for the current financial year to be in line with its expectations.”
He added: “We remain focused on our strategic priorities and believe the current economic uncertainties will present attractive investment opportunities to continue to expand our development pipeline in our target destinations, creating value for our shareholders and underpinning the long-term growth of the brand.”
New owned hotel openings at Milton Keynes and a refurbished property in Old Street, London are expected to open in June.
Other hotels are planned for Bristol and Paris-Charles de Gaulle airport, subject to planning permission.
Planning consent has been gained for new properties in Oxford and Blackpool, both of which are expected to open in the 2020-21 financial year.
Other new owned hotels in development include Cardiff, Cambridge, Chester and Dublin.
Franchised hotel openings this financial year include Zurich and Amsterdam Schiphol airport with Malaga and Bur Dubai expected to open in the next financial year.
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