Room00 Group, the primary platform for hostels and boutique hotels in Spain’s Iberian Peninsula, along with the Dorsa Holding Group have acquired TOC Hostels for €20 million. The partners have acquired 100% of the shares from Ignacio Catalán and Salvador Torrens to become one of the largest hostel chains in Europe and widen its reach to more countries and cities, Room00 Group said in a statement.
With this acquisition, Room00 Group will close the year with 30 open properties totaling 2,260 rooms across three countries and 20 more in the pipeline.
The acquisition has enabled the consolidation and expansion of the TOC Hostels brand in Spain, Portugal and Italy, with the brand projected to record a turnover of €70 million in its first year, Room00 Group said in a release.
Room00 plans to expand TOC’s portfolio, which consists of Room00 Hostel, Room Select Hotels and LETOH LETOH, and add a fourth brand as well as strengthen its presence in Madrid, Barcelona, Seville, Malaga, Granda and Valencia.
The acquisition not only cements the position of hostels and hotels and increase its visibility, it also represents a significant consolidation in the urban hospitality sector across Europe, said Ignacio Requena, CEO and founder of Room00 Group.
“In addition, the combination of both companies will generate operational efficiencies, cost reduction and improvement of services. The acquisition of TOC Hostels by Room00 Hostels has the potential to significantly transform both companies and the market in which they operate, contributing. competitive advantages and new growth opportunities,” Requena said.
Each hostel chain is differentiated with its own characteristics and design elements, services and customer experience.
Room00 Group was advised by the investment banking arm of CBRE.
The hostel segment has been witnessing a post-pandemic period of positive momentum, fueled by the preference of solo trips among Millennials and Gen Z travelers and an overall shift in accommodation choices. Last month, Thailand-based Dusit Hotels & Resorts announced a partnership with Generator and Freehand Hotels, the developer and operator of experiential hostels and boutique hotels, to drive global expansion and foray into newer markets. While Generator and Freehand Hotels will leverage its network and experience in developing lifestyle hybrid accommodation models in the budget lifestyle segment in the U.S. and Europe, Dusit will leverage its position in Asia and the Middle East to explore opportunities to introduce Generator and Freehand’s properties in key destinations in these markets.
