There has been a new development in the increasingly competitive niche of hostels and hybrid boutique hotel-hostels in Europe.
Madrid-based conglomerate Dorsa Holding Group and boutique-hotel and hostels operator Room00 Group, also based in the Spanish capital, have acquired 100% of the shares of TOC Hostels from owners Ignacio Catalán and Salvador Torrens for approximately €20 million ($22.1 million).
In an Aug. 30 press release accompanying the news, Room00 claimed it had now become the largest hostel chain in Europe, now comprising 30 assets in operations and a further 20 in the pipeline.
With presence now in its Iberian home market of Portugal and Spain, and also in Italy, Room00 has 1,360 rooms in operation and 900 in construction.
On Aug. 29, one day before Room00’s news, Generator and Freehand Hotels — the hotel firm and brand that might claim to have kickstarted hostel and hostel-hybrid accommodations options — announced news of a strategic partnership with Thai firm Dusit Hotels and Resorts.
That agreement will help both sides expand into new overseas markets and regions.
Ignacio Requena, CEO and founder of Room00 Group, said the firm’s strategy would be a consolidation and expansion of the TOC Hostels brand throughout Spain, Portugal and Italy, foreseeing a turnover in its first year of at least €70 million.
In a note sent to Hotel News Now, Room00 said, “the company invoiced €40 million in 2023 and has invoiced almost €30 million in the first semester; in this second semester, we have seven openings, so we must invoice between €65 million and €75 million this year.”
Room00 — which has accommodation brands Room00 Hostel, boutique Room Select Hotels and lifestyle LETOH — will announce a fourth brand soon, which is likely to include some of the six TOC Hostels’ properties, which are in the Spanish cities of Barcelona, Granada, Madrid, Málaga, Sevilla and Valencia.
The firm operates in Iberia’s principal cities.
“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.
Room00 Hostels has six properties in operation, with three in Madrid and single options in Lisbon, Sevilla and Valencia, and its parent company also owns a coffee-shop brand, Syra Coffee.
The hostels flag has pipeline assets in Lisbon, Málaga and Porto.
Room Select has operational hotels in Bilbao, Lisbon, Madrid, Rome, Porto and Sevilla, and pipeline assets in Lisbon and Málaga, while LETOH has hotels in Madrid, San Sebastian and Sevilla, and pipeline projects in Bilbao, Lisbon, Málaga and Porto.