UK-based easyGroup launched its easyHotel discount accommodation brand in Hungary by officially opening its first hotel in the capital Budapest. The 59-room hotel will be operated on a franchise basis by local company MedScan Kft, which spent HUF 200 mln and a little under one year to renovate a century-old downtown building.

“According to current statistics, if a hotel returns the investment within 10 years, that’s considered good,” said Kornel Tokics, one of the two partners running MedScan. “That’s what we are aiming for, but we are confident that we can recover our investment even before that.” Following the easyHotel low-cost model, the Budapest facility will offer sparsely-furbished rooms of around 10 square meters each. The hotel will have no bar or restaurant, while room cleaning, Internet or luggage storage will be available only for an extra cost.

The starting room price will be EUR 29, and prices will climb as capacity is filled up, following the discount airline booking model. “This should result in an average price that we aspire to keep competitive with that of other hotels in the city,” easyGroup founder Stelios Haji-Ioannou said at the opening ceremony. Commenting on the possible expansion of the easyHotel brand in Hungary, officials said there are no concrete plans as yet, but Tokics said he is “already thinking about hotel number two,” while Haji-Ioannou said that easyHotel tends to stick with its local franchise partners and would be ready to extend cooperation with MedScan. The first easyHotel opened in London in 2005. Currently three easyHotels operate in London, and one in Switzerland’s Basel. The next easyHotel is expected to open in November in Switzerland’s Zurich, while in total there should be 18-20 easyHotels worldwide by the end of next year and several times more in subsequent years. “We have contracts signed for up to 60 hotels for the next three to five years,” Haji-Ioannou said. Company officials did not reveal initial booking data for the Budapest hotel, noting that marketing operations, conducted mainly online, are only beginning to gear up. Elaborating on the business model, Haji-Ioannou said the local operator pays a franchise fee that goes toward maintaining the central easyGroup booking system and central brand marketing expenses. In addition to profit on operations, the franchisee also stands to profit from the appreciation of the value of the building, which the company bought last year at an undisclosed price.
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