Sleeperz Hotels secures £7m investment to fund expansion
By Effective Communication
Innovative budget hotels business Sleeperz has secured a major £7m investment to fund future growth in the UK – with the target of achieving a portfolio of 10 hotels by 2015.
Just 18 months after opening the first in a new generation of compact lifestyle hotels – in the Welsh capital of Cardiff – Sleeperz has succeeded in raising funding to build a second hotel, in Newcastle, and earmarked five further sites for development.
The equity finance has been raised from the company’s current investors, including Andre Hoffmann, and a new investor, Connection Capital. The debt finance for the Newcastle development is being provided by The Co-operative bank.
Preparatory work for the building of a 98-bedroom, six-storey Sleeperz hotel in the heart of Newcastle is now underway, with full construction starting this October and a projected opening date of October 2011.
Heads of terms have also been secured by the company to develop hotels at five further sites next to mainline rail stations, including Liverpool, Birmingham and Manchester.
Sleeperz Hotels Chief Executive David Myers described the £7m investment as “a major endorsement in the Sleeperz proposition of compact lifestyle hotels in prime city centre locations offering great value for money.”
He said: “Raising finance is very tough in this market, and to secure £7m of investment is an exceptional achievement, particularly for a hotel business of our size. The hotel market is littered with single-site niche businesses that have failed to expand and progress to develop a second hotel.
“Sleeperz brings something new and exciting to the market and, with the backing of major investors, we are here for the future. Our business target is to develop and operate 10 Sleeperz hotels by 2015.”
Having opened in November 2008 as the storm clouds gathered on the worst recession in living memory, Sleeperz hotel Cardiff succeeded in achieving over 60 per cent occupancy in its first year. It is currently performing significantly ahead of its competitive set, according to the TRI Hospitality Consulting benchmarking organisation, recording year-on-year sales and profit growth.
The hotel is ranked fourth out of 92 on the Trip Advisor travel review website, and records a 90 per cent guest satisfaction rate on LateRooms.com.
Sleeperz hotel Newcastle will mirror the same ethos of compact, stylish air-conditioned rooms in a prime central location. The new-build development will be adjacent to Newcastle Central Railway Station.
“Newcastle is one of the leading UK hotel markets for RevPar room rate performance. The city boasts a very strong leisure and corporate market and there will be few hotels – if any – with the location that this site will give us. We are very excited about this development,” said Mr Myers.
“As with Sleeperz hotel Cardiff, we will create quality stylish compact rooms with fresh, colourful and contemporary interiors. All of this will be available to the consumer at room rates, including free wi-fi, from £50.”
Mr Myers added: “There are so many positives in the Sleeperz brand. Not only have we managed to buck the trend in what is an increasingly challenging market – but in sticking to our ideals of convenience, value and style, are now driving on to growth and expansion.”
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