Hostel group a&o has purchased a pair of hotels in Manchester, as the latest step in its plan to grow its presence in more key European cities.
The Manchester acquisition follows a similar recent deal in London, which saw the group also acquire a standing hotel, for conversion to its hybrid hotel format. a&o is deploying capital to acquire properties which it can quickly convert, as it looks to grow its presence in the UK market. It is also signing other conversion and new build sites, looking to build on its position as Europe’s leading hostel brand.
A Swift Conversion
In Manchester, a&o has been able to purchase two hotels located next to one another, providing the opportunity to combine the two assets into a single operating property, once a refit has taken place. A former Ibis and Novotel on located on Portland Street and Dickinson Street in Manchester city centre will be refurbished to provide a total of 1,218 beds across 303 rooms.
A&o has said it will keep the properties open for business, while it carries out the GBP8.2 million rolling refit, which will take until the end of the first quarter of 2027. Once finished, the property will have a flexible mix of accommodation comprising around 30% private rooms, 30% family rooms plus 40% traditional hostel dormitories, more suited to travelling student groups, or for travellers on a budget to share.
The four storey hotels were acquired from Ares Real Estate funds and EQ Group. The investors acquired the hotels as operating Ibis and Novotel in 2024, when they bought a portfolio of Accor branded hotels across the UK from previous owner LandSec, in a GBP400 million deal.
“As one of the UK’s best performing hotel markets outside of London, attracting over 1.9 million visitors annually, we have long regarded Manchester as a key strategic target,” said a&o CEO, Oliver Winter. “The transaction concludes a highly successful year for a&o Hostels which has seen us deliver around 5,500 new beds across four new cities, as well as bring the Schulz Hotel platform into our group.”
Investors Back Growth
In late 2023, investors StepStone Group and Proprium Capital Partners took on the a&o business, working alongside Winter and the team that built the business. They committed around EUR500 million to invest in growing the business. In October 2025, a&o acquired a former DoubleTree by Hilton hotel in London, to launch its brand into the busy UK capital market. Similarly to the Manchester deal, the acquisition meant a fast turnaround of the property, enabling immediate operations.
Most recently, the business has acquired the Schulz hotel group, and with it the senior development team, who have significant experience in both the hotel and hostel space. The December 2025 deal saw a&o add one trading property, the 1,000 bed Schultz Berlin, as well as a second site in development, being built in Berlin’s Heide Quarter.
