European hostel group a&o has acquired a further site in Heidelberg, Germany as it continues to drive forward and underline its leading market position.
Currently, the group operates 42 hostels across ten country markets in Europe, of which it directly owns 19 properties. During 2024, a&o kept up the growth momentum as it opened new hostels in Brighton, Antwerp and Brussels.
An addition in Germany
The Heidelberg hostel, the group’s 43rd, will open at the end of 2026, offering 118 rooms with 320 beds for individual and group guests looking for an economical stay in the German city. Construction work on the new, five storey building, will begin shortly, with development by BHB Heidelberg, part of Huereka Real Estate.
a&o goes from strength to strength, with new additions consistently growing the business. In 2023, the group recorded 6.1m overnight stays, up from 5.55m in 2022, growing revenues to EUR217m. In the first half of 2024, the business set another record with almost 3m overnight stays, and revenues of EUR111m.
The business, which is backed by investment groups Proprium Capital Partners and StepStone Group, has an allocated fund of around EUR500m to invest in further growing the hostel portfolio. “With the support of our owners, we now have the firepower to accelerate our expansion in key locations across gateway cities in Europe,” said Winter. “We are really well positioned to take advantage of the significant opportunities we see in this hugely attractive and dynamic market environment and to take our budget hostel product to a new level.”
After experiencing the shock of a dramatic rise in energy costs, following Russia’s invasion of Ukraine, a&o has taken significant steps to ensure its business is greener and more resilient in future. The company has set a target of becoming the first hostel chain in Europe to be net zero for CO2, and sets out its progress in a publicly available annual sustainability report.
A commitment to reducing carbon
The latest to be published, in mid 2024, covered progress to the end of 2023, noting a 77% reduction in CO2 emissions since 2015, when a&o first started measuring its outputs. Fundamentally, the business aims to reduce carbon via several routes, including reusing existing buildings for many of its hostels. A EUR20m investment plan will be spent on energy efficiency improvements across the portfolio, while there will also be staff training to help ensure hostels are operated in a more energy efficient way. Twenty of the group’s hostels have been certified under the GreenSign ranking, with 19 achieving level four. The a&o hostel in Venice Mestre has been certified level 5, making it the first hostel in Europe to achieve this standard of sustainability.
Further work continues to decarbonise the business, including working with suppliers on so-called Scope 3 emissions from the supply chain.
