EasyJet tycoon cruises into new ventures

EasyGroup Chairman Stelios Haji-Ioannou poses for photographs outside his company offices in London, Friday Oct. 7, 2005. The founder of easyJet and the 15 other brands under the easyGroup umbrella, Stelios Haji-Ioannou, 39, has been savvy at making himself the star of his own marketing campaign.

AP Photo/Matt Dunham
Published: Tuesday, November 1, 2005 at 6:01 a.m.
Last Modified: Tuesday, November 1, 2005 at 12:00 a.m.
LONDON - In an elegant row of white Georgian townhouses, one building stands out - a lurid orange band around its balcony and the backpackers on its doorstep break the stately harmony of the rest of the crescent.
Behind its doors, Stelios Haji-Ioannou chats with patrons of the easyHotel, a venture that replicates the model of his outstandingly successful easyJet airline by offering basic accommodation over the Internet at prices dependent on demand.
Haji-Ioannou has made serious money out of investing in no-frills services that allow consumers on a budget to stay in London's upmarket Kensington district, fly to Madrid for the weekend or take a Caribbean cruise.
"He's marketing himself as the consumer champion, a bit of a Robin Hood figure who steals from the rich to give to the poor," said Nirmalya Kumar, a marketing expert at the London Business School. "It's seen as a fun brand, with a reputation for making a difference."
EasyJet - which has added scores of routes and its 100th plane this year - was one of Europe's big success stories of the 1990s. But there is some unease in the market at the extent and speed at which Haji-Ioannou is rolling out new businesses.
The easyGroup brand now comprises 16 brands - ranging from watches to car rental - with the greatest hopes pinned on the easyHotel and easyCruise offerings. It plans to expand the cruise brand to the U.S. market this year.
"The brand is well understood for the airline, but obviously every time you apply it to something different, the challenge is multiplied," the Greek-born multimillionaire said.
The model for the easyGroup businesses has largely stayed the same, with Haji-Ioannou choosing businesses where he can practice yield management. The consumer who books early and online pays less and gets a further discount for buying when demand is low.
But consumers must also be willing to trade convenience - and sometimes comfort - for price.
Patrons on the cruise ship don't get a traditional cruise so much as a large boat that takes them from place to place. The rooms are porthole free and activities are limited to a hot tub on deck and a bar.
Visitors to the easyHotel, which recently opened a branch in Switzerland and plans more across Europe, will find that 25 pounds - around $45 - merits them a cubicle just large enough to accommodate a bed, a shower pod and a plasma TV on the wall that costs another $9 a day to watch. "My criteria for choosing a hotel for a one-night stay is different from a week," Haji-Ioannou said, but acknowledged that the next easyHotel will have more windows and space.
Nigel Massey, a London-based hotel consultant, saw a difference between offering customers a non-reclining seat on a short-haul flight and a windowless room for a night.
"Hotels are less forgiving . . . because you are in them longer," Massey said. "Especially if they are orange and claustrophobic."
While there is concern about easyHotel, there is more optimism about easyCruise following a successful summer Mediterranean season. The ship, hopping from St. Tropez to Portofino, ran at more than 80 percent capacity after initial woes including backed-up toilets.
Haji-Ioannou's next major challenge is taking the ship - for now there's just one - to the Caribbean for the winter season. The company is relying on interest from the United States, where its brand is largely unknown outside its less-than-successful foray into the Internet cafe market in New York. He said the cruises, which start in November, are booked at around 86 percent of capacity for the first month - a figure the company will need to maintain to make it viable. Half the existing bookings are from the U.S. market, he said.

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