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SINGAPORE: The British-based easyGroup, which has a range of businesses including aviation, hotels and car rentals, is eyeing the market potential in Asia.
But it's looking for franchisees instead of setting up its own operations in the region.
The group which is widely known for its easyJet budget airline believes the most promising brand for Asia will be its hotel line.
This was according to easyGroup founder Stelios Haji-Ioannou, who was speaking on the sidelines of a leadership dialogue series organised by the National University of Singapore.
Visit the easyGroup website and you'll find a long list of brands under the easy umbrella. They range from watches to pizza stores.
But it's the budget hotel line that easyGroup believes is most suitable for the Asian market.
It is aiming to do this through a franchisee. easyGroup currently has over 10 hotels mostly in London and others in Germany, Switzerland, Hungary, and Greece.
Sir Stelios Haji-Ioannou, founder & chairman, easyGroup, said: “The first business that I have plans to expand in Asia is easyHotels. easyHotels is a franchise hotel business, a budget hotel.
“If you understand the concept of a low cost airline like easyjet, you're more likely to understand what easyHotel stands for.
The easyHotel brand is one that you can actually take from Europe and put into a place like Singapore. The underlying real estate and the business of knowing the economy will come from a franchisee.
The easyHotel brand is currently being franchised overseas by Istithmar Hotels, which has been renamed Nakheel Hotels in markets like the Middle East and North Africa.
However, the expansion schedule has been hit by the financial crisis.
None of the eight hotels across Pakistan and India scheduled for completion last year have yet to be launched.
Sir Stelios continued: “We had a contract with a company called Nakheel which is part of the Dubai group to expand the franchise actually into India and the subcontinent. And we all know the finances of Dubai are not exactly where they used to be.
“They are opening the first hotel in Dubai next month hopefully. But we haven't actually been able to expand beyond that."
The group's initial intentions to expand its budget cruise line appear to have also sailed into uncertainty.
A few years ago, Easy had planned to base part of its cruise operations out of Singapore, but that has since been franchised to a Greek company, Hellenic Seaways.
The chairman added: “Remember we are in the middle of a difficult recession in Europe. easyCruise is based in Greece. I actually sold the underlying interest in the business to a Greek ferry company. At the moment, it's focused on Greece and given the financial problems in Greece which are at the moment dominating the headlines. I doubt it will be able to expand.”
Coming out of the downturn, easyGroup believes its cautious approach to expanding has helped it emerge relatively stronger.
For now, easyGroup said it will focus on its European operations.
It also believes that building on its branding will help keep its edge against rivals who copy its business model. - CNA/vm
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