The 24,000 sq ft Grade I-listed building will undergo a £2m refurbishment programme to reopen as Safestay’s second London hostel next April.
Owned by the Royal Borough of Kensington and Chelsea, the venue operated as a YHA hostel until recently.
“This is an iconic building in the heart of central London. We are delighted to have secured it and we believe that the overall appeal of the building, combined with its unique location within Holland Park itself, will mean it soon becomes one of London’s flagship hostels,” said Larry Lipman, managing director of Safestay.
The announcement follows the company’s listing on the London Stock Exchange’s Alternative Investment Market (AIM) earlier this year, and fits within its strategy to expand in the UK and Europe, with a further 25 new venues in the pipeline.
At Westhouse Securities, Safestay’s nominated adviser and broker, analyst Robert Sanders said: “We are encouraged by management’s strategy to open a further 25 sites over the next few years, of which, four to six will be in London.”
Safestay currently has two hostels in the UK – a 407-bed venue in London’s Elephant and Castle and a 153-bed hostel in York, with rates starting from around £20 per night.
Hostel market growth
After years of under-investment, the UK hostel market is now driving growth in the accommodation sector by adding style and a boutique feel to its properties while maintaining its budget offering.
‘Poshtels’ were identified as a major trend in the 2015 UK travel market by the Global Trends Report 2014.
The segment’s appeal goes beyond Generation Y, with older and business travellers both seeking more affordable and ‘authentic’ accommodation experiences.
The report said the UK hostel segment was expected to grow by 3 per cent between 2013 and 2018 to reach sales of £216m and 653 outlets by the end of that year – stepping into budget hotel territory.