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EasyHotel revenues up 60% in Q1 but warns on margins

By Michele Maatouk

Date: Monday 21 Jan 2019

EasyHotel revenues up 60% in Q1 but warns on margins

(Sharecast News) - EasyHotel posted a rise in first-quarter revenue on Monday but warned that 2019 will be more difficult than the previous year and margins will take a hit.
First-quarter revenue was up 60% with total system sales up 31%. Meanwhile, owned hotels like-for-like revenue per available room was 11.2% higher, outperforming the competition by 5.2%.

However, the company cautioned that 2019 will be "more challenging" than the year before and said it has decided to continue to drive revenue growth and brand recognition at the expense of gross margin.

EasyHotel said its franchised hotels performed particularly well across the UK. However, results across the wider European market were more varied, and its hotels in Holland performed less strongly than they had in 2018.

Hotels opened in the final quarter of last year are trading well and exceeding the company's occupancy targets.

Chief executive officer Guy Parsons said: "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.

"These current uncertainties are presenting us with opportunities, which might not otherwise be possible, to acquire sites on good terms in central locations in our core target cities, such as Dublin, Bristol and Paris Charles de Gaulle.

"Well publicised uncertainties and frequent regulatory delays can postpone completion of our hotels and how quickly they reach maturity. However, 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."

At 1115 GMT, the shares were down 3.5% to 84p.

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