Thursday, December 12, 2019

U City supports plan of Vienna House via hotel acquisitions

Nov 18. 2019
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By THE NATION

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Following the acquisitions of 19 hotels in Germany and Switzerland this year, U City is optimistic that the takeovers will pave the way for its subsidiary Vienna House (VH) to facilitate individualistic seamless travel across Europe.

Vienna House (VH), the largest hotel group in Austria, is also eyeing investment opportunities in Asia. 

Piyaporn Phanachet, Chief Executive Officer of U City, said that U City invested over Bt890 million in acquiring 19 hotels, of which 17 are in operation while two others are in the pipeline via its subsidiary, Vienna House Germany II GmbH.

This asset portfolio comprises boutique properties from the “arcona” hotel group and five hotels under the Steigenberger brand, of which 18 are located in Germany with one in Switzerland.

All properties will eventually be managed under the Vienna House brand. The new additions brings U City hotel portfolio to 57 hotels/9,210 keys, owned in form of both freehold and leasehold.

In addition, the group also manages third-party hotels under brands (Vienna House, Vienna House Easy, U, Eastin, and Travelodge), boosting the total number of hotels to 117, of which 78 are in operation.

The group aims to explore further business opportunities in Europe, especially business travel which dominates the overall travel market in the region, while also looking to embrace hotels with ununiformed elements that flare with their own unique characteristics, be it structures with historic façade, central location, or room designs.

Rupert Simoner, CEO of Vienna House, mentioned that the key reason Vienna House came down to this deal was because of the locations, the properties themselves, and the existing human capital.

Rupert Simoner, CEO of Vienna House

“The German market, both inbound and outbound, is considered one of the most important markets for us. This is the first objective of our expansion apart from the properties’ structures and designs that can fit under the Vienna House brand. Moreover, the people working in these hotels have the spirit of what we look for” he said. 

“The arcona hotels are very well maintained with relatively solid performance with a clear upside. So, what we’ll focus on sales as we expect to see 3 per cent growth in the first 18 months,” added Simoner.

Tapping into a niche “boutique lifestyle market,” the newly-branded Vienna House hotels will cater to the needs of both business travelers and leisure segment alike.

“The way we define luxury is probably different nowadays as we may no longer look at the stars rating but the trend of travellers seeking for service that is unique and practical. If you want to characterise our brand’s philosophy by one word, I’d say “individualistic,” explained Simoner.

In 2020, we will see the boutique Vienna House brand emerge across several locations in Austria, Germany, and Switzerland; namely Stuttgart, Wetzlar, Osnabruck, Munich, Bremen, Schaffhausen, Leipzig, Baden-Baden, Potsdam, Berlin, Stralsund, Rostock, Braunschweig, Wismar and Eisenach.

These properties will all be converted under Vienna House’s sub brands: Vienna House, Vienna House Easy, and Vienna Townhouse; by beginning 2020.

On an expansion outlook, Vienna House is prone to 7-9 per cent growth annually or organically up to five properties to be signed into the group per year.

“Asia is a fast-growing market and with our strong partner, U City, we now have offices throughout Asia. So, that’s where the groundbreaking is going to be when we will have one or two flagship development of Vienna House in an Asian metropolitan cities,” he added.

“As a shareholder, we are delighted to see the accomplishment of Vienna House, which will be only a starting point. Their fun, creative lifestyle hotels will be a good add-on to modern business and leisure travellers. We are keen to bring in synergies, where possible, and support the brands to grow even further.”, Piyaporn said.

U City is a property investor and developer with total assets of Bt53 billion as of the third quarter,2019.

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