Generator builds with Berlin launch

With a new building opening in Berlin, Generator Hostels has shifted from owner operation to becoming a third party manager, opening up another avenue for growth.

Hostel brand Generator has opened its latest property and its fourth in Germany, Generator Berlin Alexanderplatz. The destination relaunched following a full conversion that included refurbishment of the bar, restaurant and common areas, and the establishment of 695 beds in a mix of 132 guestrooms.

The property belongs to investor Schroders Capital, and is Generator’s first opportunity to prove the value of delivering on a third party management deal with an institutional landlord. More than purely a hostel, the accommodation includes twin and shared rooms, as well as new room categories that cater for families, and rooms for four to eight people travelling together.

Growing hostel demand

The Berlin property opens into a hostel marketplace that has seen strong demand return, following the pandemic. Hostelworld, a dedicated online travel agent for the hostel niche, has recorded record bookings around the globe, as the younger generation get travelling once more. For many on a budget, and those in school and college groups, hostels remain their chosen way to get to see the world.

The Berlin hostel is not Generator’s only third party management agreement. In autumn 2022, the company struck a deal with RFR Group, owner of the Paramount hotel in New York. The historic landmark property closed as a hotel during the pandemic in 2020, and then languished as the city’s hotel demand was slow to return. RFR then opted to shift to a hybrid accommodation model for the property, with the Generator brand responsible for filling the remodelled rooms.

“We are excited to partner with Generator to manage and re-programme the historic Paramount,” said Aby Rosen, Principal of RFR. “Generator’s reputation for leading the shared accommodation space is unmatched and their record success aligns with our goals of creating a best-in-class destination in Times Square.” The property underwent a revamp that saw many hotel rooms remain in a double or twin bedded format, while some were turned into bunk bed sleeping arrangements more normally associated with the hostel space.

Investors back the niche

The Generator business has been owned since 2017 by Queensgate Investments, which has built the hostel portfolio, and added in a second brand, Freehand Hotels in the USA. Today the combined business has a presence in 12 European cities, and five US locations.

And Generator is not the only hostel brand appealing to owners of hostels and hotels, who are looking for a fresh take on their accommodation assets. European brand Safestay signed their first management agreement in spring 2024, taking on a hostel in Calpe, Costa Brava as well as acquiring a hotel in Cordoba for conversion to its hybrid hostel format.

 

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