European hostel chain A&O is set to invest €500 million to aid its expansion across Europe.
The company is seeking to expand its presence in locations such as London, Paris, Rome, Madrid, Lisbon, Berlin, Munich, Prague and Amsterdam, with its strategy to include the conversion of existing office and retail properties into hostel accommodation.
A&O’s portfolio currently comprises 38 hostels in 25 cities across nine European countries. In 2023, the hostel chain posted a turnover of €217 million.
Why it matters
As hostels continue to gain more recognition in the travel accommodation sector as a viable and lucrative segment within the broader hospitality industry, the announcement by A&O Hostels to invest €500 million in its European expansion is a substantial development. Furthermore, A&O’s strategy of focusing on converting existing office and retail properties into hostel accommodation aligns with a wider industry trend towards adaptive reuse of buildings, with hostel companies potentially now competing with hotels in terms of seeking out and securing conversion-appropriate properties.
What they said
Founder & CEO Oliver Winter said: “Whether lease or ownership, new build or conversion, our property expansion covers a wide variety of property types. We are flexible and we want to grow. We are very flexible in terms of size and floor plans, which gives us a head start and makes it easier and faster to implement.”