Madrid-based Room Mate Hotels is thriving once more with the help of new investors.
The COVID-19 pandemic forced the Spanish hotel firm into bankruptcy. Room Mate has 23 hotels across three brands in five European countries, as well as 14 aparthotel properties in its Be Mate brand and one hostel in Istanbul affiliated with its Wabi Sabi brand.
The company's new investors are Mississauga, Ontario, Canada-based Westmont Hospitality Group and New York City-based peer investment firm TPG Angelo Gordon, which together bought the company in July 2022.
Room Mate President and founder Kike Sarasola is looking forward to better days ahead for the company in its newest chapter. He added the company's new owners believe in the brand's vision.
“It was the COVID situation and external factors that forced us into bankruptcy. Afterwards, we continued our business with new investors. They respected the management team, maintained the same company philosophy and pursued the same objectives,” he said.
Despite a rough few years that shook the global tourism industry, Sarasola is optimistic in the resiliency of travel and hospitality.
“[The pandemic] caught all of us off guard, but it has helped us learn to endure, fight and be strong. It has been demonstrated that tourism is the backbone of Spain’s economy and a priority sector in other countries. I believe it should teach us that we need to believe in ourselves and stand united, so that institutions can support us,” he said.
When tourism rebounds, everything else follows suit, Sarasola said. Especially now, people prefer to spend their money on travel and experiences rather than on investments or other indicators of wealth, he added.
“People are focusing more on the present, living for today, rather than thinking too much about the future. They still prioritize travel, tourism, dining out at restaurants. Interestingly, while real estate and car indicators have declined, hotel indicators continue to rise,” he said.
In November 2023, Room Mate bought its first hotel in the United Kingdom, with the acquisition of the Lime Tree Hotel in the Belgravia district of London.
The company saw a 37% growth in sales in 2023, with a total revenue of €106.5 million ($114.1 million). But Sarasola said he's thrilled that the hotel industry as a whole is recovering well, not just his company.
“First and foremost, let me say that the entire sector has performed well, not just Room Mate. We all experienced spectacular growth in 2023, which I believe we deserved after enduring everything we went through,” he said.
Room Mate's new investors have been pleased with the firm’s latest performance figures, Sarasola said. He added that the brand’s hotels “rank among the top in the cities where we operate.”
“Our clients consistently affirm that we’re doing a great job. So, I believe we can congratulate ourselves — both the overall sector and Room Mate — for our diligent work. The results and customer feedback speak for themselves,” he said.
Spanish DNA
Sarasola said he has been heartened by the loyalty of the brand’s guests.
They are “continuing to adore our brand. We are a brand that truly doesn’t deceive — transparent and authentic. What you see is what you get. I believe the public recognizes this, and our DNA resides in our clients, both internal and external. The internal client reflects the essence of our company.
“We are fighters and committed to excellent customer service,” he added.
Going forward, Room Mate has room for growth both in northern and southern Europe, Sarasola said. Room Mate is investing more than €12 million in hotel openings and renovations in 2024.
“With the support of our investors, we are actively seeking to acquire, lease or manage new hotels. … Additionally, we have their backing to explore opportunities not only on a hotel-by-hotel basis but also with other hotel chains that may be interested in selling or merging.
“We remain open to any type of expansion. Indeed, this year is one of growth for us,” Sarasola said.
He now sees a gap for the firm above its current market space, one in the high-end and luxury hotel segment.
“We believe there exists a market niche between 4-star and 5-star hotels, one that caters to a subtle luxury, appealing to clients who don’t seek ostentatious extravagance but do desire personalized attention.
“These discerning clients appreciate classy and understated luxury and seek guidance for various personalized services, such as securing [soccer] tickets or attending top musicals. Our goal is to provide precisely this kind of personalized attention, tailored to the preferences of our clientele who appreciate this quiet elegance,” he said.
The pandemic and its wake have also pushed Room Mate to evolve its hotels and consider other accommodation types, Sarasola said.
“The hostel we had in Istanbul has now come under the ownership of Be Mate, while the Wabi Sabi [hostel] brand remains with Room Mate,” he said. “We do plan to develop [Wabi Sabi] further in the future, but for now we are focusing on hotels and tourist apartments. Our recent venture at the Palazzo di Fiore in Venice has been a success. It comprises 16 apartments with one, two, three or four bedrooms. Remarkably, within just three months, it has become the second-highest hotel in the chain in terms of average daily rate and occupancy.”
Before his hotel career, Sarasola was a professional equestrian and represented Spain at three Olympic Games. After the hurdles of 2021 and 2022, he said he's ready for whatever challenges come next.
“I believe we’re going to have a great year, but it won’t be like 2023, which was spectacular in every way and with double-digit growth. It will be very good but more stable,” he said.