Whitbread PLC (LON:WTB) is launching a no-frills hotel chain with small pod-style rooms as Premier Inn’s owner seeks to refocus its business after the sale of cafe chain Costa Coffee to Coca-Cola Corp.
In a news release on its corporate website, the FTSE 100-listed firm – which reports its first-half results on Tuesday - said the new hotel concept, called Zip by Premier Inn, will be located on the outskirts of major towns and cities.
READ: Whitbread’s interims to be overshadowed by August’s £3.9bn sale of Costa coffee business to Coca-Cola
The group said rooms will cost from £19 a night - Premier Inn prices typically start at £49 - and will be less than half the size of a standard Premier Inn room, at 8.5 square metres.
The first Zip hotel, with 138 rooms, will open in the Roath district of Cardiff early next year, Whitbread said, and it has secured a second site in Southampton, where 140 rooms are planned.
Whitbread’s chief executive, Alison Brittain, said the spin-off would cater for the “ultra-price-sensitive customer looking to zip in and out”.
She added: “It offers us an exciting new platform for growth and will give us access to a broader customer base, attracting those guests who are on a particularly tight budget but still expect and deserve the basics done brilliantly.”
The firm said the Zip rooms - created by PriestmanGoode, the design consultancy behind first-class cabins for Air France, Lufthansa and Swiss airlines- will feature lightboxes, en-suite power showers, 24-inch televisions and twin single beds that can be pushed together to create a double.
It said Zip hotels will have communal areas that serve breakfast from £3.95 and transform into a bar in the evenings, and there will be an ironing room on every floor.
Similar to no-frills airlines, there will be other optional paid-for extras, with rooms not cleaned daily for guests staying for more than one night but additional cleaning can be purchased for £5 per day, the firm added.
Premier Inn, Britain’s biggest budget chain has nearly 800 hotels, including some in Germany and the Middle East.
Whitbread sold its Costa chain for £3.9bn in cash to Coca-Cola in August to focus on its hotels business.