YOTEL announced that a fund affiliated with Starwood Capital Group has committed to making a strategic investment of $250 million in YOTEL, including acquiring a 30 percent stake in the company and investing in real estate acquisitions for new build, hotel conversion and adaptive reuse properties.
Starwood's investment in and ongoing partnership with YOTEL is said to further enable YOTEL's rapid worldwide expansion, with a specific focus on Europe, North America and Asia. The deal also was made to help YOTEL strengthen its brand identity, expand geographically and enhance its guest experience.
Starwood has already secured YOTEL sites in Edinburgh, Glasgow and Amsterdam for 2019.
"This strategic partnership and investment highlights Starwood's longstanding passion and commitment to invest in innovative hospitality platforms,” said Barry Sternlicht, CEO of Starwood Capital Group. “YOTEL is an exciting brand focused on technology, smart design and a distinct guest experience at an affordable price, which is the right strategy amid the current wave of digital disruption. YOTEL has global appeal and can be easily scaled with key strategic acquisitions and developments in desired [locations].”
Cody Bradshaw, managing director, head of European hotels at Starwood Capital Group and Sarah Broughton, senior vice president, Starwood Capital Group will join the YOTEL board of directors, alongside representatives of the company's major shareholders including the Jassim Al-Bahar Group, IFA Hotels & Resorts, United Investment Portugal and Aqarat which jointly own 65% stake in the company.
"We are delighted to announce a new institutional investor into YOTEL alongside our existing shareholders,” said Talal Al Bahar, chairman of YOTEL and the lead investor. “Starwood Capital Group's investment validates the company's strategy, provides strength and stability at a critical expansion stage and opens up new horizons for YOTEL to become the leading affordable luxury hotel brand."
The partnership with Starwood Capital Group comes as YOTEL celebrates its 10th anniversary in 2017, a year of significant growth that includes the openings of YOTEL Boston and YOTEL San Francisco in North America and YOTEL Singapore, which will open on Oct. 1 and will be YOTEL's first hotel in Asia.
Bank of America Merrill Lynch advised Starwood Capital Group on the transaction.