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Room Mate may soon expand with management and franchise models

The American fund Angelo Gordon, which bought Room Mate from the Canadian group Westmont, explains that it sees this acquisition as a real opportunity in the hospitality market.

As Jacopo Burgio, Director of Real Estate Products for Europe at the Angelo Gordon Fund, explained, "We didn't get into Room Mate because we liked the urban product, but to take advantage of the opportunity to buy an operating company. Every day we are asked to do different things and we analyse them all.

Room Mate was facing significant financial problems and was on the verge of liquidation, which allowed the American fund to buy the chain for "an attractive price". However, Jacobo Burgio acknowledges the work that has been done to enhance the brand, which he described as "sensational". This is evidenced by its more than 100,000 followers on Instagram.

The deal also provided Gordon with "a platform to be more competitive, because hotel-by-hotel returns are very complicated. With this platform, we can now do much more. In fact, we are already looking at new brands, real estate deals with Room Mate, or the possibility of franchising to get more cash flow, since franchising has a higher multiple than leasing."

However, the US fund's growth strategy "is not solely focused on Room Mate, but it is certainly a good basis for growth, whether it is a franchise or a business model, not a rental".

The fund's director of real estate products for Europe also pointed out that "from a financial point of view, we are going to make some changes. In the more family-owned Spanish companies, for example, the institutionalisation of reporting has not happened in the same way as in other countries; there are very different points. We are here to restructure and change things, but keeping the values of the brand.

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