European hostel group a&o has committed a further EUR500m to expanding its portfolio of city centre properties. The company has committed to significant further growth, as it looks forward to opening an additional hostel in Florence, Italy in summer 2024.
Conversion plans
Founder and CEO Oliver Winter sees opportunities for the company to develop new hostels by converting office and retail space in urban centres, and is flexible on his approach, saying: “Whether lease or ownership, new build or conversion, our property expansion covers a wide variety of property types. We are flexible, and we want to grow.”
In 2023, a&o recorded 6.1 million overnight stays at its properties, up from 5.55 million in 2022, as it welcomed 2.7 million guests. Full year revenues grew to EUR217m, making 2023 the company’s most successful to date.
One such office conversion is the new a&o hostel in Florence, which will launch in the summer with 470 beds, created from offices that are within walking distance of the city’s Piazza del Duomo. The group likes the fact that converted properties offer the opportunity to retain individual character.
Heading for net zero
Conversions also fit with a&o’s corporate aspiration to become Europe’s first net zero hostel chain by 2025. The group has spent the last two years investing to improve the energy efficiency of its existing properties, and says its CO2 footprint today is 3.73kg per night, up to 80% lower than industry competitors. In November 2023, the group’s Venice hostel achieved a maximum GreenSign level 5 rating, one of only 18 properties in Europe to achieve the accolade.
Today, a&o has an operating portfolio of 38 hostels, in 25 cities across nine European countries. Looking ahead, a&o has a wish list of locations across Europe that includes both new locations, and cities where it would like an increased presence, including London, Paris, Rome, Madrid, Berlin, Munich, Prague and Amsterdam. It always looks for central locations, with strong public transport links.
