EasyHotel, owned by Stelios Haji-Ioannou the EasyGroup chairman who has launched 15 businesses in his career to date, was developed after the entrepreneur spotted a gap in the market for a "clean, safe, consistent hotel room in city centres at a great price". The cut-price hotel offers rooms for £10 a night.

The first EasyHotel property, which will open on August 1, has 34 rooms sized between 60 square feet and 80 square feet, with the group saying it believes that consumers will be prepared to trade off room space for a good price.

The hotel service has been designed to fit in an area where the cost of property is high, with the new London hotel set off the Cromwell Road, between South Kensington and Earl's Court.

EasyHotel, which sells its bookings through its website, said there are no plans for advertising at the moment due to the rooms "selling like hot cakes".

"If you have a great price you are not reliant on marketing. We will see if the rate of sales continues as it is at the moment and react accordingly," James Rothie, director of corporate affairs for EasyGroup, said.

EasyHotel is being marketed as an alternative to the "mom and pop" operated bed and breakfast accommodation in the same part of town, which would charge more for a room of a less predictable quality, the group claims.

The hotel has a manager on duty 24 hours a day, but there are no common areas such as a bar or restaurant. Some 28 of the rooms are standard doubles without windows, three that have windows are priced at a premium and two are designed for disabled customers.

All rooms have a double bed with linen and a duvet, en-suite bathroom with shower, air conditioning and pay-as-you-go 10 channel TV. Housekeeping during a stay is an optional extra for which customers pay £10.

EasyHotel has plans to expand in the UK and internationally through franchising opportunities being offered to locally based entrepreneurs, with the first signing up in Basel, Switzerland, to open by September 2005.

EasyGroup most recently launched its low-cost cruise service, EasyCruises, EasyMusic.com and EasyMobile.

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