The Old Street site of hospitality chain easyHotel is to be partially converted into offices while the hotel segment of the buildign will be made smaller.
The 162-bedroom hotel, which last year contributed £1.7m underlying profit to the company’s accounts, will be reduced to 92-bedroom capacity.
This brings the hotel back to the original size it was when easyHotel acquired the space in 2012 for £10m, following a rejection of a retroactive planning application to extend the number of bedrooms.
Meanwhile the addition of an upper floor, making the building six storeys tall, will coincide with the conversion of the upper floors to office space. The plan is subject to planning permission but has so far met with no opposition during meetings with Islington Borough Council.
Chief executive Guy Parsons explained that “the board considers the retention of the 92-bedroom hotel, together with an extension to the upper floors for additional office accommodation, to be the best outcome for shareholders.”
The smaller hotel will be refurbished to match ‘new look’ format hotels which the group said had been successful in raising revenue per available room in Manchester and Birmingham.
Analysts at Investec anticipate a short-term adverse impact in 2018 and 2019 after the reduction of the hotel but left estimates for this year's revenue and profits unchanged.