STOCKHOLM Aug 15 IKEA, best known as the
world's largest furniture retailer, plans to build a budget
hotel chain across Europe, following a trend for cheap-but-cool
accommodation driven by low air fares and increasingly
price-conscious business travellers.
The 100 hotels, which will not feature IKEA's eponymous
flat-pack furniture nor its brand name, represent the company's
biggest real estate development to date.
Demand for stylish yet affordable rooms from austerity-hit
business guests and leisure travellers is high and growing,
according to Harald Muller, senior executive at the property
unit of Inter IKEA, the company that owns the IKEA brand and
"'Budget designer hotels' is today the fastest developing
hotel segment." he said.
Motel One, citizenM and B&B Hotels are all part of a new
breed challenging established budget brands such as Travelodge,
Whitbread's Premier Inn and Accor's Formule 1.
IKEA's first hotel will most likely open in Germany in 2014
and the chain will be run by an international hotel operator,
"There is no IKEA furniture in it," Muller said. "It is not
an IKEA hotel. It's a continuation of our normal investment
activities in real estate."
Inter IKEA already owns a few hotels and has more in the
works, but the new project would be its first chain and will top
its 26-acre home, office and hotel scheme around the Olympic
park in London.
Inter IKEA is identifying and buying sites for future hotels
in the chain which will be launched in Belgium, Austria, the
Netherlands, Scandinavia, Britain and Eastern European countries
Inter IKEA's property assets total around 750 million euros
but it has the financial muscle to be a larger developer.
In its fiscal 2010/11 year, IKEA Group, which operates most
IKEA stores under franchise from Inter IKEA, raised net profit
by 10 percent to a record 2.97 billion euros ($3.66 billion) on
revenues of 25.17 billion euros, another all-time high.
($1 = 0.8116 euros)
(Reporting by Anna Ringstrom; Editing by David Cowell)