Europe’s a&o Hostels has published its latest sustainability report, as the group heads towards a target of being the continent’s first net zero hostel chain in 2025.
With 39 hostels in nine European nations, a&o is a leader in scale in its sector. It is hoping that its approach will not only benefit its own business and the environment, but will also inspire others to act and measure the carbon impact of their own businesses.
Offsetting travel impact
“At a&o, we are convinced that traveling should be possible for everyone. Travel educates, broadens horizons and creates intercultural understanding,” explains founder and CEO Oliver Winter. “The fascinating and positive effects of travel must not be called into question by the negative effects of our industry”.
In 2023, a&o recorded 6.1m overnight stays and grew revenues to EUR217m, the most successful year to date for the business. With many guests being young people, impacts on the environment remain front of mind for everyone.
The group says it is consistently working to reduce its carbon impact, and is generating 77% less CO2 emissions than when it started measuring in 2015. In 2023, it calculated that impact at 3.32kg per overnight stay, a reduction of 410 grams from the previous year.
The company has committed EUR20m for energy efficiency improvements at its hostels, over the next five years, and has had its properties evaluated against the sector-wide GreenSign standard. Twenty of its sites have achieved Level 4 certification, with a new hostel in Venice achieving the Level 5 standard, the first hostel in Europe to do so.
New hostels are often repurposed existing buildings, which means embedded carbon is retained – better than new construction. But this approach then demands structures are thermally upgraded, a different challenge. Arben Maliqi, a&o’s ESG director commented: “Energy-efficient refurbishment of the property portfolio and reduction of Scope 3 emissions are clearly the biggest challenges.”
Measuring downstream CO2
Another important measure for any business is its Scope 3 emissions, which are those generated indirectly by upstream and downstream activities, for example in the purchase of goods and services. The challenge is in requesting that subcontractors and suppliers start to measure and declare their own carbon impacts, in order to better reduce their own environmental impacts.
In late 2023, a&o was bought by investment firms StepStone and Proprium, who have committed further funds to expanding the portfolio. In March 2024, Winter said the group has up to EUR500m to spend, on buying and converting properties in European city centres to new a&o hostels. “Whether it’s leasing or ownership, new construction or conversion, our real estate expansion covers a wide variety of property types.”
Pipeline properties include a new hostel in Heidelberg, expected to open in mid 2025. The 112 room property will be created by converting an existing block near the city’s railway station, with the project backed by investor TPG Real Estate.
