Budget better placed for downturn - easyGroup boss

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

As financial markets sag and business sentiment wanes, 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 this year ... 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 told a small group of reporters 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," he 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 presently 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."

People were increasingly turning to cheaper options in terms of vacationing, he said.

"The problem is how many people will drop off the bottom and not do anything at all. It's one thing to go on holiday in an expensive hotel, it's another to go on holiday in a cheaper hotel and it's another thing to be unemployed and not go on holiday at all," he said.

EasyHotel, an offshot of the easyGroup brand behind British low-cost airline easyJet and a range of other "easy" brands, is opening in the resort of Larnaca in May 2009.