Collective Hospitality would respond to insolvency
RR | New York | August 28, 2024
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RELATED TOPICS: Ace, Bankruptcy, CitizenM, Collective, Collective Hospitality, Gary Murray, Generator, Insolvency, Lifestyle, M&A, Mama Shelter, Millennials, New York, Rafael Museri, Selina, Singapore, Soho House, The hoxton, The Standard
Selina, the chain that targets digital nomads and young tourists, recently declared bankruptcy and entered into receivership, and Collective Hospitality is the group that stands to buy the majority of its assets, which include 100 accommodations in 22 countries across the Americas, Europe and Asia.
Singapore-based Collective Hospitality, led by founder Gary Murray, operates under several brands across Southeast Asia and fits into Selina’s target market, which is why it was interested in acquiring the assets under a deal that was signed by court-appointed administrators in July.
The board of directors of Selina Hospitality, as revealed REPORTUR.usfiled a statement in July stating that the chain no longer has reasonable prospects of avoiding insolvency. (Selina announces bankruptcy and would sell its properties.)
The bankrupt Hotel chain with about 30,000 beds has lost almost all of its value since it went public in December 2021 at a valuation of $1.2 billion, after changing its strategy, closing unprofitable properties, laying off most employees and reaching debt agreements with creditors, which were not enough.
Selina was founded by Israeli Rafael Museri and was expected to be valued at $1 billion on the stock exchange, although with just over 100 hotels it currently has a turnover of just over $100 million per year.
His growth plan, which he had access to ‘Development‘, on the one hand, involved acquiring properties below current prices, and on the other, capitalizing on the offer of Millennials without a chain specialized in them and with a focus on teleworkers.
On the supply side, its strategy pivoted because there will now be more opportunities for vacant properties given the decline in offices, and this would allow it to obtain better prices (Selina: the keys to the most disruptive Hotel chain that will open in Spain).
On the demand side, he expected that holiday Travel would rise much more than corporate Travel, and that, focused on the niche of young people and teleworking, it could also generate more income from food and drinks or from room rentals.
Selina claimed to have a technological system that allows it to locate properties with liquidity problems in order to address them directly and also avoid an intermediary and a sales process with competitors that drives up prices.
With its IPO, mergers and acquisitions were expected to expand the brand, which competed in a lifestyle niche with others such as Soho House, CitizenM, Generator, Mama Shelter, Ace, The Hoxton, The Standard or Freehand, which all have fewer properties.
However, Selina spooked the stock market a year ago after its shares plummeted by 90% amid questions about its finances and model, according to ‘Development‘, which led analysts to see it as the next ‘WeWork’, after it went public in October 2022 with a valuation of around 1.2 billion dollars, rising in months to a market capitalization of 130 million (Selina: fear of losing almost all stock market value due to endless losses).
