The Rezidor Hotel Group has made its first move into the budget sector with the acquisition of stake of Prizeotel, the German start-up.
The deal will initially see Rezidor take a 49% stake in Prizeotel for EUR14.7 million (US$16.1m), but the agreement gives Rezidor the right to acquire the remaining 51% four years from now.
Prizeotel currently operates three “budget designer hotels” in Germany and has one more under development.
“[Prizeotel] ideally complements our compelling brand portfolio currently ranging from midscale 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 Wolfgang M. Neumann, president & CEO of Rezidor.
“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,” he added.
Marco Nussbaum, founder & CEO of Prizeotel, commented; “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.”
Following the purchase, which will be closed in the next few weeks, Rezidor and Prizeotel plan to integrate their business development, sales, marketing and distribution. Prizeotel will continue to be led by Nussbaum, while Rezidor will “steer key strategic aspects”.
The companies said they now expect to accelerate Prizeotel’s expansion plans across Germany, as well as moving into “key cities in Austria, Switzerland and Benelux”. Prizeotel’s three hotels are located in Hamburg, Hannover and Bremen and feature a total of 555 rooms.
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