REG - Safestay PLC - New Management Contract for Spanish Hostel

SafestayAnnouncement

17/04/2024 07:01

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RNS Number : 8739K  Safestay PLC  17 April 2024

17 April 2024

Safestay plc

("Safestay", the "Company" or the "Group")

First Management Contract to run Independent Hostel

 

Safestay (AIM: SSTY), the owner and operator of an international brand of
contemporary hostels, announces that it has signed its first management
contract to run the resort-based 120 bed Calpe Seafront Hostel on Spain's
Costa Blanca on behalf of a property investment company.

 

The Calpe Seafront hostel is located opposite Salt Lake, home to flocks of
greater flamingos, five minutes' walk from Arenal-Bol beach and a 45 minute
drive from Alicante airport. It was acquired after the hostel had been put
into administration during the pandemic, when trading was severely curtailed.
The hostel has been closed since. As an established hostel operator in Spain,
Safestay is well positioned to take over the management under the Safestay
brand and incorporate it into the Group's booking system. The management
contract is for an initial 20-year term and importantly should form the
template for further management outsourcing transactions.

 

Prior to the pandemic, the Calpe Seafront was a successful hostel and the
Group is confident of being able to quickly re-establish trading and return it
to being a successful business. It is a two-storey building with a mix of
rooms with 4-6 beds in each and some private rooms. All have air conditioning
and there is an attractive outside terrace. Some refurbishment work is
required to prepare the building for re-opening and this work, funded by the
landlord, has commenced and is scheduled to complete in June 2024. The Calpe
Seafront Hostel will adopt Safestay branding.

 

Calpe is known for outdoor sports and activities including sailing, climbing,
hiking and cycling. These attractions bring a number of people to the area,
from dedicated sports enthusiasts to young explorers, to solo travellers and
families. A wide range of potential customers.

Under the management contract, Safestay will receive a fixed management fee
plus a percentage of revenue and profits above certain levels. The Calpe
Hostel will be Safestay's fourth Spanish based hostel and eighteenth hostel
overall. It will benefit from Group economies of scale as well as  being
part of the Group's booking system and overall marketing programme which last
year welcomed 848,633 guests across the portfolio.

Larry Lipman, Chairman of Safestay, said, "'We are excited about the addition
of the Safestay Calpe Seafront on the Costa Blanca in Spain to our portfolio
of upmarket hostels across Europe. This is the first management contract
signed by Safestay and we are already discussing other similar opportunities
with the aim of adding an asset-light portfolio of hostels to sit alongside
our expanding freehold and leasehold portfolio. Safestay Calpe Seafront, while
different in being resort based, is a unique hostel which will fit naturally
into our network. I believe it will be a strong addition alongside our new
Edinburgh hostel, which is also opening in June."

Enquiries:

Safestay plc
 
Tel: +44 (0) 20 8815 1600

Larry Lipman

Liberum (Nomad & Joint Broker)
                                    Tel:
+44 (0) 20 3100 2000

Andrew Godber / Edward Thomas / Josh Borlant

Novella
 
            Tel: +44 (0) 20 3151 7008

Tim Robertson / Safia Colebrook

 

For more information visit our:

Website www.safestay.com (http://www.safestay.com)

Vox Markets page https://www.voxmarkets.co.uk/company/SSTY/news/
(https://www.voxmarkets.co.uk/company/SSTY/news/)

Instagram page www.instagram.com/safestayhostels/
(http://www.instagram.com/safestayhostels/)

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