BRUSSELS—The Rezidor Hotel Group has entered the economy segment through the acquisition of a 49% stake of Prizeotel for about $16.4 million (14.7 million euros) and has secured further rights including the acquisition of the remaining 51% in four years.
Prizeotel is a start-up company with three operating properties in Germany and one further hotel under development. The brand was founded by Marco Nussbaum and co-created with New York-based industrial designer Karim Rashid.
“[The partnership] ideally complements our compelling brand portfolio currently ranging from midscale to luxury, and facilitates our responsiveness to the evolving needs of our guests. With this transaction, we now offer additional choices and opportunities to both our customers and owners,” said Wolfgang M. Neumann, president & CEO, Rezidor. “The acquisition allows us a fast-paced entry to the economy segment, an increasingly attractive sector due to its rapid development opportunities and resilience to the economic cycles. Prizeotel is a commercial success story and has differentiated itself through innovative urban design, tech-savvy focus, personal touch and unique team culture—a total fit to Rezidor.”
Following the purchase, which will be closed during the next few weeks, Rezidor and Prizeotel plan an integrated approach towards the brand’s business development as well as sales, marketing and distribution. Prizeotel will continue to be led by Nussbaum and his team who retain full responsibility for the business. Rezidor will steer key strategic aspects through its shareholding governance represented by Neumann. An integrated development and commercial support will be in place to accelerate the pursuit of growth opportunities and optimize business support for Prizeotel.
“Combining and cross-fertilizing Prizeotel’s market and brand knowledge with Rezidor’s international expertise will unlock value for both organizations. We will initially grow the German network and target key cities in Austria, Switzerland and BeNeLux primarily through leases, but also management agreements. Prizeotel will offer a unique investment proposition with its compelling design, value engineered development costs, high operating efficiencies and an optional turn-key construction solution,” said Elie Younes, EVP & chief development officer, Rezidor.
Prizeotel currently operates three hotels with a total of 555 rooms in German cities Hamburg, Hannover and Bremen.