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LONDON - European hostel operator Safestay PLC (AIM:SSTY) has signed its first franchise agreement to expand into the Austrian alpine resort of Kitzbühel, according to a company press release statement.
The agreement with Sycomore Entwicklungen GmbH will see two existing properties rebranded as Safestay Kitzbühel Centre and Safestay Kitzbühel Alpine from September 1, 2025. The initial term is five years with an option to extend for another five years.
The two properties, currently operating as Roomie Alps Design Hostel Kitzbühel and Guesthouse Johanna hotel, offer a combined 70 beds and are located within a five-minute walk of the main ski lifts.
Under the agreement, Safestay will receive guaranteed fixed annual payments plus performance-based fees, including commission for direct bookings through its platform. Sycomore will handle the rebranding process following Safestay’s brand standards.
The properties will be integrated into Safestay’s sales and marketing platform, with Sycomore gaining access to the company’s operational expertise and IT infrastructure.
This franchise model represents a capital-light expansion approach for Safestay, which currently operates 20 hostels and one hotel across Europe. The company has stated ambitions to double its portfolio size over the medium term.
The move marks Safestay’s first expansion into an alpine resort, diversifying beyond its core market of European city centers.
Larry Lipman, Chairman of Safestay, described the agreement as "an exciting opportunity" that supplements the company’s core freehold and leasehold expansion strategy with "capital-light, flexible growth opportunities."
The global hostel market is expected to reach $8.9 billion annually by 2027, according to market research cited in the press release.
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