SAFESTAY, the Aim-listed property developer of upmarket hostels, posted a jump in full-year sales thanks to growing demand from families, business travellers as well as traditional backpackers for its plush rooms.
The four-year old company was founded four years ago with the idea of sprucing up the hostel market and providing a safer and more “stylish” alternative.
It currently has three “poshtels” – one in York and two in London including John Smith House, the former Labour party headquarters in Elephant and Castle, which has 74 two to eight-bed rooms.
In December, it won a 50-year lease on a listed property in west London’s Holland Park after a hotly contested battle. The former Jacobean mansion, which has 360 beds, will open this June after a £2m makeover.
Safestay’s chairman Larry Lipman plans to open around four hostels a year both across the UK and overseas: “The market is huge and very fragmented. Our plans are for European expansion as well as further sites in London and potentially in Edinburgh.”
He said the group’s upmarket offering meant its hostels appealed to families and young adults as well as traditional backpackers.
“We are attracting a different set of customers, very much like easyJet, which set out as a budget holiday airline but then realised there were lots of men in suits in its seats and started tapping into business customers,” he told City A.M.
In its maiden set of results – almost all of which are from the Elephant and Castle hostel – revenues rose 19.8 per cent to £2.3m in 2014 while earnings rose 62 per cent to £972,000 from £600,000.