Safestay inks first franchise agreement in Austria

(Sharecast News) - Hostel operator Safestay said on Monday that it has signed its first franchise agreement with Sycomore Entwicklungen.

Safestay said Sycomore Entwicklungen will operate under its brand name and systems, with effect from 1 September, with an initial term of five years and an option to extend for a further five years.

The AIM-listed firm stated that the agreement covers two hostels in the "sought-after alpine resort" of Kitzbühel, Austria, a year-round destination with world-class ski facilities and summer attractions, making it "an ideal location" for Safestay to broaden its reach beyond its core market of city centres in major European capitals.

Safestay said the agreement will see the two properties - currently operated as the Roomie Alps Design Hostel Kitzbühel and the Guesthouse Johanna hotel - rebranded and operated as Safestay Kitzbühel Centre and Safestay Kitzbühel Alpine, respectively.

The two properties offer a combined 70 beds in Kitzbühel and are located just a five-minute walk from the main ski lifts, with easy access to local restaurants, bars and transport links.

Under the terms of the agreement, Safestay will be entitled to receive guaranteed fixed annual payments, plus additional performance-based fees, including commission for direct bookings via the Safestay platform. Safestay also noted that the rebranding process will be executed by Sycomore under the existing Safestay brand standards.

As of 0900 BST, Safestay shares were down 2.17% at 22.50p.

Reporting by Iain Gilbert at Sharecast.com