Room Mate Hotels grows 37% in sales in 2023

• Kike Sarasola, president of Room Mate Hotels and ex Olympian champion, is launching the new image of the chain, as well as the new brand “Room Mate Collection” that will house the 4-star plus hotels starting with Giulia in Milan and Gerard in Barcelona and expanding to other Europe’s cities.
• New Room Mate Collection hotel properties will open at the end of 2024 / early 2025 in the United Kingdom (London), France (Paris), Italy (Sicily, Rome and Milan) and Germany (Berlin, Hamburg or Munich).
• In the fiscal year 2023, the company (currently 22 hotels) made a positive net profit, a historical record, with 15.7 million euros of normalized EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and a margin ratio close to 15%. Profit that is expected to exceed by 53.5% in relative terms, by 2024 with a recurring normalized EBITDA of 24.1 million euros.
• The new brand responds to the demand of Room Mate customers who are looking for a step further in design, “silent luxury” and a different experience.
• Kike Sarasola aims to grow Room Mate to 35 hotels in the next 18 months with an investment of more than 16 million euros.

Room Mate Hotels, a hotel chain born in Spain in 2005 with a strong international presence, launches its new image and a second brand “Room Mate Collection” backed by a strong 2023 financial year. The chain chaired by Kike Sarasola has closed the year with “zero debt” and a 37% growth in sales and normalized billing of 106.5 million euros; which represents a normalized EBITDA (Earnings Before Interest, Taxes, Depreciation, andAmortization) of 15.7 million euros, with a margin on sales close to 15%.

In addition, the company expects to end this fiscal year 2024 with a normalized EBITDA of 24.1 million euros, this is an EBITDA growth compared to the actual data for 2023 of 8.5 million euros (53.5% in relative terms) with an equivalent conversion ratio to operating cash in a 1 to 1 ratio; and aims to reach a sales figure of around 150 million euros, once all the hotels are renovated and open.

Room Mate Collection, the new brand

In this favourable context, the chain announces not only the rebranding of its parent brand, but also the launch of Room Mate Collection for 4-star plus hotels, which emerges as an evolution of the Room Mate brand itself for those clients who are demanding a silent luxury, far from excess or ostentation, says Sarasola. The hotels with less than 80 rooms will have the same essence of the brand, but with a more serene and elegant decoration and more personalized customer service without losing the other flagship qualities of the chain such as the location in the centre of the city or the tranquility of being at home, hallmarks of Room Mate throughout its history, he points out.

Of all the current hotels, for now, two will become part of the Room Mate Collection: Gerard (66 rooms) in Barcelonaand Giulia (85 rooms) in Milan. In addition, the chain is studying all the operations that come to it located in city centres - whether in the form of purchase, rental or management- and is immersed in negotiations to incorporate new properties at the end of 2024 or early 2025 in the United Kingdom (London), France (Paris), Italy (Sicily, Rome and Milan) and Germany (Berlin, Hamburg or Munich) with the focus on growing mainly in Europe. A growth that issupported by various American, European, and Middle Eastern funds aiming to purchase properties to be managed by the company. Room Mate Collection is the response to the demand of the Room Mate client which, according to Sarasola, represents a 'level up' in disruption and attention to our already high standard of affordable luxury, just as it once demanded of us to create tourist apartments under the brand and that's what we did.

Room Mate Hotels

Room Mate Hotels leads this new stage with a brand rebranding accompanied by new hotels that will be added by the end of the year, as well as renovations in the current ones, new customer service ideas or technological improvements so that our client's pre, during and post trip is always a unique experience, clarifies Sarasola.

The Spanish chain, which prides itself on “not making chain hotels”, currently has 22 (about 1,700 rooms) -each with its own personality and name- spread across 5 countries: 12 of them located in Spain (mainly Madrid and Barcelona) and 10 abroad; being 6 in Italy (Venice, Florence, Rome and Milan), 2 in the Netherlands (Amsterdam and Rotterdam), 1 in the UK (London) and 1 in Turkey (Istanbul).

Room Mate hotels are different from each other, but all offer advantages such as late check out or breakfast until 12 noon, alongside other comforts such as a good bed, an exceptional bathroom and rooms with a unique design as, according to its philosophy, a room in Madrid cannot be the same as one in Rome. Each of its spaces seeks excellence, avoiding the boring and basic, for which it has had some of the best designers in the world such as Jean Nouvel, Lázaro Rosa-Violán, Melián Randolph, Tomás Alía, Lorenzo Castillo, Teresa Sapey and Patricia Urquiola, among others. Teresa Sapey was also responsible for the interior design of Palazzo dei Fiori, Venice, the new concept that thechain opened last year in Venice, which is luxurious and unique, and strategically located between San Marco and the Ponte Rialto.

Key results 2023

After the pandemic, the global trend has been consolidated in which leisure and tourism are more relevant within personal/family spending, compared to more traditional ones such as the house or the car. This has also been reflected in the growth of Room Mate Hotels in all its locations, both in sales and in ADR (Revenue Per Available Room), especially Italy, with ADR growth vs 2022 of 21% in Milan, 28% in Rome and almost 40% in Florence. The objective of Room Mate is to continue growing throughout Europe -it has just opened Lime Tree in London (26 rooms), but it maintains its focus on Italy- a country to which Sarasola has travelled for half the year to expand business, and where the chain has just opened 1 palace in Venice with 16 apartments with 1, 2, 3 and 4 bedrooms and is about to open Capo d'Africa (65 rooms) in Rome in a few months. We are increasing our presence in Italy and, between now and the end of the year, with what we already have in the pipeline we will be able to add 3 to 5more hotels in this country alone, confirms Sarasola. Another city that stands out for the chain is Madrid, as it is already positioned among the main luxury and shopping destinations in Europe. The 2023 figures are the result of the growth in occupancy and average price (growth in sales by more than 25% compared to 2022) that the chain will consolidate in the coming months thanks to the process of partial or total renovation of its hotels, in which Room Mate hopes to invest between 2023-2025 more than 16 million euros withthe renovation of the interior design and other structural reforms of both Luca (55 rooms) and Isabella (22 rooms) inFlorence - about to be completed at the end of April - and Aitana (285 rooms) in Amsterdam - whose work is scheduled to be completed in July - or Giulia (85 rooms) in Milan and Capo d'Africa (65 rooms) in Rome, to which is added the opening of the Palazzo dei Fiori hotel (16 rooms) in Venice.

Outlook for 2024

The prospects remain strong for 2024 with more sustained growth. During the first quarter of 2024, Room Mate Hotels has already exceeded the planned results for the first quarter of 2024, with normalized EBITDA growth of over 30% compared to the same period in 2023; and expects to close the year reaching a figure of around 150 million euros -with all hotels operating- which would mean a growth of 53,5% in normalized EBITDA compared to last year's figures.

In 2024, the push of Spanish hotels stands out, growing well above double digits, among which some places stand outwith  growth of more than 20% compared to last year, such as Malaga (more than 27%) or Madrid (more than 21%).

Strategic objectives for 2025

Room Mate will begin 2025 with a renewed image, in accordance with its philosophy and values (urban, eclectic and personalized design and customer vocation) that will have been reflected in hotels such as Capo d'Africa, which will become the future Room Mate Mía in Rome. In addition, it aims to grow to 35 hotels in the next 18 months and go from 1,700 rooms to 3,600, which represents an exponential growth that almost doubles its capacity, for which it has a planned investment of more than 16 million euros. It will continue to focus on comfort, design and location sothat its clients can enjoy an unparalleled and personalized stay, in the purest Room Mate style.

Main nationalities

These numbers are supported by more than 2.4 million people who have enjoyed Room Mate hotels in 2023, 91% ofwhom are international clients and with an average age of between 25 and 54 years. We are growing into a more mature type of client that demands another level of quality and luxury that is related to our growth in ADR and sales inthe different nationalities of origin, explains Sarasola.

Of these, the chain's main visiting nationalities are the United States with 14% of turnover, followed by the Netherlands (10% and thanks to the excellent performance of the hotels in Amsterdam and Rotterdam), Spain (9%) and the United Kingdom (8%). In 2024, the company foresees a clear return of the Chinese customer, who in this firstquarter has already been in the TOP10 nationalities of the chain (third position in sales), followed by Brazilians and Kuwaitis.

In the specific case of hotels in Spain, the Madrid customer in 2023 has been mainly international (77%) with a special growth in American tourists (16% of sales). It stands out that Mexico and Argentina have already entered the TOP10 ofsales in the capital. In Barcelona, 91% of the clientele is international, with Americans standing out with 12% and China and Brazil, which have entered the TOP10 of nationalities in the city. In San Sebastián, it is noted as a curious fact that in Q1 of 2024 the Japanese have been in the TOP5 of nationalities attracted by gastronomic tourism.

In Italy, the United States has also led occupancy in 2023 with 23% of turnover of the total income for the chain, followed by the Middle East client (10%), Italy and the United Kingdom, both with 5%. In Milan, the Middle East customer also gains importance (16%), followed by the United States (13%) and China with 5%, and in which Italians only represented 4% of sales. As a curious fact, in Q1 of 2024, Chinese customers have already reached third positionin sales.

Sarasola explains that 2023 has been the year of consolidation that demonstrates that the chain's own visionary and disruptive formula, which has always focused on customer happiness, has resulted in this great profitability. Now, our expansion objective is to grow the Room Mate Collection brand and continue expanding the market in Europe.

A company committed to society and the environment

Room Mate shows its commitment first of all to its employees or “roomies”, a visible face to customers who always shows up with a smile to convey the philosophy of the house. And he actively collaborates with various organizationssuch as the Fight Against AIDS Foundation, among others.

In sustainability, Room Mate was the first company to manufacture all its uniforms from recycled plastic bottles collected from the Mediterranean Sea, in collaboration with Ecoalf, as well as offering 100% plastic water bottles from sustainable brand Aura. They also avoid waste of soaps and recycling the unused amount to make new bars that are sent to Africa and Southeast Asia. In addition, all hotels in Spain use 100% renewable energy and the showers reduce the amount of water without impacting the pressure, saving between 30 and 60%.

Room Mate is characterized by being a pioneer in customer service, such as offering completely free Wi-Fi to its clients.