Low Cost Hotels in Europe
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1 Low Cost Hotels in Europe Economy and Budget Brands in Europe ITB Hospitality Day Low Cost Hotels Three key elements: Simple product (no frills, few additional facilities) Market positioning (aggressive marketing, price-conscious travellers) Economy, e.g. Campanile Express by Holiday Inn Budget, e.g. Easy Hotel Etap Low operating costs (staff, other expenses, internet booking) Ibis Formule 1 Berlin, Thursday 9 March 2006 Low cost = Budget and Economy brands Kyriad Première Classe Motel One Russell Kett Managing Director HVS International London office Premier Travel Inn Travelodge 9 March 2006 HVS International London Office 1 9 March 2006 HVS International London Office 2 9 March 2006 HVS International London Office 3 1
2 Low Cost Hotels in Europe Top Ten Budget Brands in France 2005 Low Cost Hotels in Europe Three key elements: Simple product (no frills, few additional facilities) Market positioning (aggressive marketing, price-conscious travellers) Low operating costs (staff, other expenses, internet booking) Low cost = Budget and Economy brands Brand Ibis Formule 1 Campanile Etap Premiere Classe Owner/Operator Louvre Acor Louvre Hotels Rooms 30,700 21,100 19,600 17,500 14,500 Three key elements: Simple product (no frills, few additional facilities) Market positioning (aggressive marketing, price-conscious travellers) Low operating costs (staff, other expenses, internet booking) Low cost = Budget and Economy brands France most mature market in Europe Kyriad Louvre ,900 France most mature market in Europe B&B Balladins Galaxie SA RMH ,200 5,600 Followed by UK Villages Hotel Villages Hotels 55 4,100 Fasthotel Fasthotel 56 2,600 9 March 2006 HVS International London Office 4 9 March 2006 HVS International London Office 5 9 March 2006 HVS International London Office 6 2
3 Top Ten Budget Brands in UK 2005 Low Cost Hotels in Europe Five Leading Budget Brands in Germany 2005 Brand Premier Travel Inn Travelodge Express by Holiday Inn Ibis Days Inn Innkeepers Lodge Campanile Formule 1 Sleep Inn Owner/Operator Whitbread Permira InterContinental Cendant Mitchells & Butler Louvre CHE Group Hotels Rooms 29,200 15,000 8,900 5,000 2,500 2,100 1, Three key elements: Simple product (no frills, few additional facilities) Market positioning (aggressive marketing, price-conscious travellers) Low operating costs (staff, other expenses, internet booking) Low cost = Budget and Economy brands France most mature market in Europe Followed by UK Germany continuing to develop Brand Ibis Etap Express by Holiday Inn Motel One Formule 1 Owner/Operator InterContinental Motel One AG Hotels Etap March 2006 HVS International London Office 7 9 March 2006 HVS International London Office 8 9 March 2006 HVS International London Office 9 3
4 In Summary Trends easy Hotel controls the market in Europe 110,000 rooms, 1200 hotels Louvre #2 50,000 rooms, 800 hotels Whitbread #3 27,000 rooms, 450 hotels Express by Holiday Inn #4 15,000 rooms, 150 hotels Travelodge #5 14,000 rooms, 250 hotels Polarisation of the budget hotel product Amenity creep vs amenity lite Development of super budget hotels, e.g. Dakota Entry of micro-room brands easyhotel, Yotel The latest (?) easy venture Vertical integration airline, cruise ships, car hire, hotels Franchise product Differentiating features e.g. orange livery, internet only sales distribution, micro-sized rooms, rooms without exterior windows Benefit from easygroup PR A ministorage locker for your body 9 March 2006 HVS International London Office 10 9 March 2006 HVS International London Office 11 9 March 2006 HVS International London Office 12 4
5 Guestroom The airport hotel room of the future? (Jan 03) and what it has now evolved into 9 March 2006 HVS International London Office 13 9 March 2006 HVS International London Office 14 9 March 2006 HVS International London Office 15 5
6 Yotel Concept Bathroom area No exterior windows window into corridor Capsule hotel rooms, European style Same designer as Virgin Upper Class cabin Highest quality materials throughout high tech bells & whistles plasma screen TV, movies, hi-speed internet, work-space, ensuite shower, comfortable bed swivels into sofa for day use Interior corridor can be fitted into buildings stacked where there is height Entrepreneur Simon Woodroffe (Yo! Sushi) and hotelier Gerard Greene Sites in terminals at Gatwick and Heathrow identified, initially landside room modules Also looking at non-airport locations, e.g. 200 rooms, central London 9 March 2006 HVS International London Office 16 9 March 2006 HVS International London Office 17 9 March 2006 HVS International London Office 18 6
7 Yotels Why Airports? Motel One Not exactly your typical budget hotel.! Window design located inside airport terminals taking space traditional hotels can not Offers privacy in an airport passengers often uncomfortable and unable to relax Flexible hourly pricing passengers rent rooms for for 4 hours Appeals to broad cross-section of airport passengers business, economy, transit, delayed, those departing on early morning flights Business class experience check-in from cabins, do s, watch a movie, sleep, relax, take a shower Modular construction quick installation into shell and core environments within airport terminal Strong worldwide brand and concept awareness excellent PR opportunities for airport authority 9 March 2006 HVS International London Office 19 9 March 2006 HVS International London Office 20 9 March 2006 HVS International London Office 21 7
8 s German budget hotel stable includes Etap Berlin Schönefeld Ibis Berlin City West 9 March 2006 HVS International London Office 22 9 March 2006 HVS International London Office 23 9 March 2006 HVS International London Office 24 8
9 Panel Discussion Stelios Haji-Ioannou Founder of easygroup and easyhotels Michael Mücke General Director, Economy Hotels, Germany Philippe Weyland Managing Director, Motel One, Germany It s your session ask questions! Thank You Russell Kett Managing Director HVS International 7-10 Chandos Street Cavendish Square London W1G 9DQ Tel: Fax: rkett@hvsinternational.com 9 March 2006 HVS International London Office 25 9 March 2006 HVS International London Office 26 9
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