LONDON, UK: Safestay Plc, the owner and operator of an international brand of contemporary hostels, has acquired the Hotel Auberge in central Berlin for €1.2 million. Currently operating as a 32 bedroom hotel, the Hotel Auberge is ideally suited to being converted into a modern 150 bed Safestay Hostel.
Commenting on the acquisition, Larry Lipman, Chairman of Safestay, said, “Berlin is a key tourist city which attracts around 13.5 million visitors each year and the hotel benefits from a desirable position in the centre of the town, which makes it a perfect fit for our portfolio of premium hostels. Acquiring existing leaseholds enables us to expand our reach more rapidly throughout Europe and gives us operating platforms which are immediately cash accretive. It also complements recent freehold acquisitions in Pisa, Glasgow and Venice. Our experience of converting small hotels to hostels makes us confident of being able to quickly release the potential of this site and deliver revenue growth.
Our operational success confirms we have established the Safestay model as the right one for our guests, and our focus is now firmly on expanding our network and making Safestay one of the largest hostel operators in Europe.”
With 18 hostels, Safestay is now able to offer customers a network of European cities in which to stay. Alongside the increased customer appeal, the scale of the network is attracting the attention of leisure and travel operators seeking to combine with Safestay to offer complementary services to our guests.
Located close to Berlin’s famous zoo near the centre of the city, Hotel Auberge is a natural base from which to explore this famous City and therefore an excellent site for a premium hostel. Conversion from a 32 bed hotel into a 150 bed contemporary Safestay hostel will be completed during the first quarter of 2020. The transition into a hostel is expected to transform the earnings potential of the site and it will immediately benefit from being a part of the fast-growing Safestay network.
In the 12 months to 31 December 2018, Hotel Auberge generated revenues of €0.8 million and EBITDA of €0.15 million. The consideration before transaction costs, which is also the value of the assets being acquired, is €1.2 million and will be satisfied in cash from the Group’s existing resources. The site will be operated under an 11 year lease.