NEWS
a&o Hostels accelerates UK growth with major Manchester acquisition
a&o Hostels is expanding its European budget hospitality footprint with the freehold acquisition of two adjoining hotels in central Manchester. The former ibis and Novotel properties on Portland Street and Dickinson Street will be consolidated into a single hybrid hostel-hotel with 303 rooms and 1,218 beds after an £8.2 million refurbishment. The deal gives a&o Hostels a substantial presence in one of the UK’s strongest regional city markets, just a short walk from Deansgate, Piccadilly and Manchester’s main rail hub. It also marks the company’s fourth UK asset, taking its exposure to 44 properties across 10 European cities.
The four-storey buildings, totaling around 13,000 sqm, occupy a prime city centre location benefitting from excellent connectivity and year-round demand from leisure, group and corporate travel. Previously operated under Accor’s ibis and Novotel brands, they will be reconfigured to deliver a&o’s signature mix of private rooms (30%), family rooms (30%) and dormitories (40%), positioned squarely in the value-driven segment. The refurbishment is expected to complete by Q1 2027, with operations continuing throughout, allowing the company to maintain cash flow while it rolls out new interiors, social spaces and digital guest tools. Once open, the property will cater to backpackers, school and sports groups, city-break tourists and budget-conscious business guests looking for flexible accommodation in the heart of Manchester.
Strategically, the acquisition builds on a&o Hostels’ €500 million investment programme, backed by StepStone Group and Proprium Capital Partners, which has seen the platform add around 8,500 beds across operating and pipeline assets in the past two years, including recent deals in London, Brighton, Brussels, Antwerp and Heidelberg, as well as the Schulz Hotel platform. The group is tapping into robust fundamentals in the European hostels market, where inbound tourism growth, rising price sensitivity and technology-enabled operations are helping drive an anticipated compound annual growth rate of 5.8% between 2025 and 2030. For Manchester, widely regarded as a major tech and media hub with more than 1.9 million visitors a year, the new a&o property will bring much-needed large-scale, design-led budget accommodation to a city already buoyed by Premier League football, headline music events and a vibrant nightlife and cultural scene.
Operationally, a&o Hostels enters Manchester with strong momentum. Founded in 2000 by Oliver Winter, the company has grown into one of Europe’s largest hostel chains, welcoming 2.8 million guests and recording 6.2 million overnight stays in 2024, followed by 1.4 million guests, 3.1 million overnight stays and 73% occupancy in the first half of 2025. Alongside growth, the group is pursuing an ambitious sustainability strategy targeting net-zero emissions per overnight stay, defined as less than three kilograms of CO₂ with the balance offset. With the Manchester project, a&o Hostels reinforces its position as a leading player in institutional-grade budget accommodation, while giving the city a new, centrally located hub for travellers seeking affordability without sacrificing convenience or connectivity.
Source: a&o Hostels
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