Meininger Hotels plans stratospheric expansion by tripling key count
Meininger Hotels has ambitious growth goals. (Photo: Meininger Hotels)
Meininger Hotels plans to triple its bed count in the next 5 years and aims to expand in markets outside of Europe.
Following the flotation of Meininger Hotels, the group plans a massive expansion by tripling its bed count over the course of the next five years.
This growth will be mainly concentrated outside its native country, Germany. We find out more.
Triple down for growth
Meininger Hotels, the international hybrid hotel group, has said it will increase its number of beds threefold in the coming five years, following its proposed floatation on AIM in London.
If projected figures come to fruition, Meininger will be worth €400m following the floatation. The Group’s plans to triple its bed count wouldn’t require any further capital as Meininger does not own its hotels’ freeholds, instead deploying a “capital light” roll-out strategy, where landlords contribute to the upfront capital commitment of converting a site into a Meininger in return for a long lease backed by a strong rent cover.
Meininger has enlisted Zeus Capital to guide it through the floatation period, following their successful IPO of Elegant Hotels on AIM in 2015.
The Meininger management team operates a different profit model for the hotel group, which is based on square meterage as opposed to revenue per room, and so in this way, Meininger has become 40% more profitable than a standard hotel.
Strategy for success
Meininger’s latest results for the year to 31 March 2019 saw it report revenues of £98.1 million and EBITDA of £16.5 million. Meininger, under its CEO Hannes Spanring, has more than doubled the room count since 2016 and investors know that the group’s disruptive hybrid model and future roll-out strategy is a recipe for success.
This model turns a profit from both per room and per bed rates and is marketed as a hybrid international hotel operator which offers guests a reliable, affordable and comfortable service. The Group’s bed occupancy rate is c.74% (Industry standard is <50%) and its room occupancy is c.90% (Industry standard is 77%). Currently, Meininger operates 30 hotels with a total of 4,700 rooms and 16,600 beds, mostly in continental Europe as well as one hotel in London, and a recent signing in Tel Aviv, Israel.
Meininger CEO Hannes Spanring said, “We are the first internationally operating hospitality company to bring the hybrid hotel concept to the Middle East. Although the city’s supply has grown immensely over the last 10 years, accommodation in the hostel, economy and budget segments is severely under-represented.”
The hybrid hotel model appeals to every demographic, from couples to families and business travellers, as well as backpackers and students. In this way, it can expect to continue to fulfil the demand for an economic, contemporary lodging option.