EASYHOTEL, the budget hotel chain founded by Stelios Haji-Ioannou, has signed a £60m franchise agreement with Eclipse to develop 10 hotels across the UK in the next four years.
The deal with Eclipse, which already operates the easyHotel Luton franchise, is part of a strategy to grow the chain across Europe. The business has a target to have 200 hotels under franchise within 10 years.
As well as the Luton hotel, which
opened in April, Eclipse has started developing its second property, easyHotel Heathrow, which it plans to open in October.
Lawrence Alexander, who was brought in to oversee easyGroup's hotel venture, has been attempting to franchise the chain across Europe.
It has already signed a deal with the Dubai investment firm Istithmar, through which it hopes to establish 35 hotels in the Middle East.
Mintel forecasts 38% growth for budget hotels over the next five years, with the market set to hit the £1.5bn mark by 2012. Mintel estimates competition in the sector will increase, with key players expected to grow via the acquisition of smaller brands.
Sameer Damji, managing director of Eclipse Hotels Group, said: "We firmly believe that the easyHotel brand and super-budget model have significant growth potential in the UK.
"The success that easyHotel has enjoyed over the past two years is testament to the rising demand for value-for-money hotel accommodation.
We are delighted to be playing a major role in easyHotel's future development plans and particularly excited about our next opening at Heathrow in October, as well as plans for our third site which we hope to open in Liverpool in early 2009."
Despite speculation, the group insisted it has no plans to move into India and Russia.
The full article contains 295 words and appears in Scotland On Sunday newspaper.
