Motel One Group Owner Acquires Proprium Capital's Stake in Budget Hotel Chain for €1.25 Billion

The majority owner of Motel One Group has bought back the budget hotel chain in a deal worth €4.1bn, marking a resurgence in hospitality industry dealmaking post-pandemic. This comes as the travel sector witnesses a rebound, with record profits for airlines and increased activity in the hospitality business, including potential sales of boutique chains like CitizenM. Meanwhile, Saudi Arabia’s Public Investment Fund has acquired a 49 per cent stake in Sir Rocco Forte’s luxury hotel group, with plans for expansion.

Key Takeaways

• The majority owner of Motel One Group has taken full control in a €4.1bn deal, indicating a return to dealmaking in the hospitality sector following the end of the pandemic.
• Proprium Capital Partners sold its 35% stake in Motel One for €1.25bn, a more than 20-times return on invested equity since its acquisition in 2007.
• The rebound in travel post-pandemic has led to airlines recording record profits in 2023 and triggered dealmaking among hospitality businesses.
• Motel One plans to expand to 117 locations and more than 32,000 rooms across 56 cities, with third-quarter sales increasing 15% to roughly €231mn.
• The real estate market is expected to pick up activity following stabilizing inflation and market expectations of central banks reducing interest rates.

News Content

The majority owner of Motel One Group has bought back Proprium Capital Partners' 35 percent stake in the budget hotel chain for €1.25 billion, marking a significant return on investment. This transaction reflects a resurgence in dealmaking within the hospitality sector following the pandemic. The rebound in travel after the COVID crisis has led to a surge in deals, with boutique chain CitizenM also considering a potential sale valued at around €4 billion. Additionally, Saudi Arabia’s Public Investment Fund acquired a 49 percent stake in Sir Rocco Forte’s luxury hotel group in December with plans for expansion.

Munich-based Motel One has seen significant growth, with the company planning to expand to 117 locations and over 32,000 rooms across 56 cities. Third-quarter sales have surged, increasing by 15 percent to approximately €231 million. This trend of dealmaking and expansion within the hospitality industry is reflective of the renewed confidence in the sector's recovery from the impact of the pandemic. Moreover, the broader real estate market is expected to pick up pace following a slowdown triggered by higher borrowing costs, with key players like Kering making significant property investments.

Analysis

The resurgence in dealmaking within the hospitality sector, exemplified by Motel One Group's buyback and the potential sale of CitizenM, can be attributed to the rebound in travel post-COVID. This reflects investors' confidence in the industry's recovery, leading to significant returns. The short-term consequence is increased transaction activity, signaling a revival. In the long term, Motel One's expansion plans indicate sustained growth, while broader real estate recovery suggests a positive market outlook. The surge in deals also reflects renewed confidence in the sector's resilience. As travel continues to rebound, it is likely that more investments and expansions will follow in the hospitality industry.

Do You Know?

• Proprium Capital Partners: A private equity firm that previously held a 35 percent stake in Motel One Group, a budget hotel chain. They sold their stake back to the majority owner for €1.25 billion, marking a significant return on investment.

• CitizenM potential sale: A boutique hotel chain that is considering a potential sale valued at around €4 billion. This reflects the resurgence in dealmaking within the hospitality sector following the COVID-19 pandemic and the resulting rebound in travel.

• Saudi Arabia’s Public Investment Fund: Acquired a 49 percent stake in Sir Rocco Forte’s luxury hotel group in December. This acquisition included plans for expansion, reflecting the increased activity in the hospitality industry as it recovers from the impact of the pandemic.