LONDON (Alliance News) - easyHotel PLC on Monday reported strong revenue and sales growth in the first quarter of its financial year, but said it expects more challenges to come due to political and economic uncertainties, prompting a decision to push for revenue growth over profit margin.
The stock was trading 3.5% lower on Monday at 84.00 pence a share.
Ahead of its annual general meeting, the hotels operator said it has continued to outperform both its immediate "super budget" competition and the wider hotel market.
easyHotel said total systems sales were 31% higher in its first quarter, which began in October. Revenue rose 60% in the same period, with revenue per available room up 11% year-on-year.
In the first quarter, the company said it opened three new hotels, including a 89-bedroom owned hotel in Ipswich, England, and two franchised hotels in Lisbon, Portugal, and Bernkastel Kues, Germany.
New owned easyHotels also are being developed in Bristol, Milton Keynes, Oxford, Cambridge, Chester and Cardiff in the UK and in Dublin in Ireland.
easyHotel's franchised hotels performed particularly well across the UK, it said. However, results across the wider European market were more varied, and the easyHotels in Holland suffered a weaker performance than in financial 2018. Franchised hotels are planned in Malaga in Spain, in Zurich and Basel in Switzerland, at Amsterdam Schiphol Airport and in Dubai.
Looking ahead, easyHotel believes that that financial 2019 will be more challenging than 2018. In response, it said it has taken the decision to continue to drive revenue growth and brand recognition, at the expense of gross margin, through the increased use of online travel agents.
"Whilst we are not immune from the ongoing political and economic challenges and their impact on the hotel sector, our robust business model means that we have continued to outperform our markets in the period," said easyHotel Chief Executive Guy Parsons.
"We are making good progress with our strategic priorities and are confident that the appeal of easyHotel's super budget brand will deliver long-term growth," added Parsons.
