• Stelios faces franchise challenge

Stelios Haji-Ioannou has signed-up his first franchise hotel in London, the 50-room Easton Hotel in Victoria, for his easyHotel brand.

But rather than being an individual bed and breakfast proprietor, as he initially anticipated, it is an established hotel owner and operator which already has relationships with other brands.

Splendid Hotels, which operates 15 properties including 12 under InterContinental, Choice or Best Western flags, is taking on the easyHotel badge. The property has a number of rooms without en suite facilities but all currently have windows, unlike easyHotel's first property in London.

However, easyGroup said that the new hotel would follow the original's format with extra rooms added (to take the total to 78) and windows taken out as shower pods are fitted in all rooms. It is expected to open later this year.

Shiraz Boghani, managing partner of Splendid Hotel Group, said: \As a major hotel operator used to working with the leading hotel brands, it is really exciting to be leading the expansion of the well-recognised easy brand.\

\For our own part we already operate over 1,200 rooms in four different franchised brands and this provides us with even greater coverage.\

The signing-up of Splendid follows a deal struck at the end of April with Istithmar Hotels, part of Dubai-based investment house Istithmar PJSC.

This will see 38 hotels opened across the Middle East, North Africa, India and Pakistan within the next five years. The first eight will be operational by the end of 2007.

Istithmar – which means investment in Arabic – was established in 2003 and has an initial investment capital pool of $2bn. To date it has invested $1.6bn.

Despite what appears a chaotic franchising strategy, easyHotel is rapidly establishing a presence with credible partners. The question that remains, however, is whether the brand strength of easyHotel is enough to persuade many more franchisees to sign-up without putting in adequate infrastructure support.

Stelios has previously demonstrated his willingness to adapt his model as appropriate – witness the windowless rooms and the decision not to ask guests to clean their own rooms as was first suggested.

More adaptability is required and now is the time for him to put in the cash to deliver a proper service to franchisees.

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