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29 May 2023

'Budget brands well positioned'

Stelios Haji-Ioanou (SUPPLIED)

By Michele Kambas

Budget brands are better positioned to weather the global economic downturn, though even no-frills businesses could be affected by the squeeze, said easyGroup founder.

As financial markets sag and business sentiment wanes, Stelios Haji-Ioannou said it was still unclear how much of a knock-on effect the crisis would have.

"Broadly speaking, I think 2009 will be worse than 2008. My position at the moment is that I am preparing for the worst and hoping for the best. If you can prepare and survive the worst the best will be a positive surprise," he said in his native Cyprus.

"I don't think there is a single business in the world, except insolvency practitioners, that will actually not be affected," Haji-Ioannou said.

"Everybody else will do slightly worse."

However, he said the group was pressing ahead with plans to expand its franchise of budget easyHotels. Ten are currently operating in Europe, and another 20 are in the pipeline, including a mid-2009 opening in Dubai.

"I think budget brands, relatively speaking, will do better. Possibly we will all suffer. There is plenty of evidence there is trading down," he said. "People were increasingly turning to cheaper options in terms of vacationing."

"The problem is how many people will drop off the bottom and not do anything at all," Haji-Ioannou said. (Reuters)