Rezidor enters economy segment with prizeotel win
Economy brand's expansion currently earmarked for Germany, Austria, Switzerland and BeNeLux
The Rezidor Hotel Group has entered the economy segment through the acquisition of a 49% stake of Prizeotel for US $16.14m (€14.7m), and has secured further rights including the acquisition of the remaining 51% in four years.
Prizeotel currently operates three hotels with a total of 555 rooms in Hamburg, Hannover and Bremen. Founded by Marco Nussbaum and designed by New York-based industrial designer Karim Rashid, the hotels feature a futuristic look and put a focus on technology as well as hassle-free service for business and leisure guests.
An extension of the property in Hamburg and a second hotel in Hamburg-Reeperbahn were also announced.
"We are delighted to partner with Prizeotel, an entrepreneurial and creative economy brand. It ideally complements our compelling brand portfolio currently ranging from mid-scale to luxury, and facilitates our responsiveness to the evolving needs of our guests. With this transaction, we now offer additional choices and opportunities to both our customers and owners," said Rezidor president and CEO Wolfgang M. Neumann, at the International Hotel Investment Forum IHIF in Berlin.
"The acquisition allows us a fast-paced entry to the economy segment – an increasingly attractive sector due to its rapid development opportunities and resilience to the economic cycles. Prizeotel is a commercial success story and has differentiated itself through innovative urban design, tech-savvy focus, personal touch and unique team culture – a total fit to Rezidor," added Neumann.
Prizeotel CEO Nussbaum said: "Alone we can do so little, together we can do so much. I am glad to partner with Rezidor to transform prizeotel from a local player to an international economy brand. Having started our journey back in 2009, we will now write the next chapter of our unconventional success story."
He added: "The current owners of prizeotel’s real estate will keep the properties and plan to invest in further projects."
Following the purchase, which will be closed during the next few weeks, Rezidor and Prizeotel plan an integrated approach towards the brand’s business development as well as sales, marketing & distribution.
Prizeotel will continue to be led by Nussbaum, and his team who retain full responsibility for the business. Rezidor will steer key strategic aspects through its shareholding governance represented by Neumann. An integrated development and commercial support will be in place to accelerate the pursuit of growth opportunities and optimise business support for prizeotel.
“Combining and cross-fertilising Prizeotel’s market and brand knowledge with Rezidor’s international expertise will unlock value for both organisations. We will initially grow the German network and target key cities in Austria, Switzerland and BeNeLux primarily through leases, but also management agreements. Prizeotel will offer a unique investment proposition with its compelling design, value-engineered development costs, high operating efficiencies and an optional turn-key construction solution," said Rezidor executive vice president and chief development officer Elie Younes.