Premier Inn owner, Whitbread (LON: WTB), is to launch a new “no-frills” hotel chain.
Having sold cafe chain Costa Coffee to Coca-Cola (NYSE: KO), the group is hoping to boost sales with Zip by Premier Inn for the “ultra-price-sensitive customer”.
A room will cost £19 and contain lightboxes, en-suite power showers, 24-inch televisions and twin single beds. The average price of a standard Premier Inn room is £57.
The hotels will be located on the outskirts of major towns and cities, the first opening in Cardiff in 2019 with 138 rooms.
The second location will be in Southampton, with 140 rooms.
“We have undertaken considerable research, including having had six Zip rooms on sale to customers for many months,” said Premier Inn’s managing director, Simon Jones.
“It’s clear through the research that people want the basics done brilliantly, such as a comfy bed and a power shower, but they are happy to compromise on location or some extras if they are paying a fantastic price for their room,” he added.
The rooms have been designed by Priestmangoode, which is a design consultancy that works on first-class cabins for airlines such as Air France, Lufthansa and Swiss.
The hotel will have communal areas that will serve breakfast and turn into a bar in the evenings.
Optional extras at Zip include additional cleaning, which will be purchased for £5 per day.
Whitbread is in the process of selling Costa Coffee to Coca-Cola in a £3.9 billion deal.
Angus Grierson, the managing director of the advisory firm LGB Corporate Finance, said on the deal: “The deal is an attempt to adapt quickly to changing tastes, notably the continuing rise in popularity of coffee, particularly among millennial consumers.”
“Customers are choosing lower-sugar varieties of soft drinks more than they ever have, with sales of sugary drinks declining rapidly, down 11% in 2018, thanks in part to the introduction of the UK’s first-ever sugar tax.”
