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Safestay, which owns and operates 17 hostels across Europe, has secured an £18.5m funding package from HSBC UK to support its growth strategy.
The package comprises a term loan to refinance existing funding and a Revolving Credit Facility (RCF), and Safestay said it secured the new financing to support the delivery of its post-pandemic acquisition strategy and to make investments into its existing portfolio.
The business made its first post-pandemic acquisition late in 2023, marking its return to Edinburgh with the purchase of a city centre site.
It now plans to use a portion of the funding from HSBC UK to make a £1m investment into refurbishing the 225-bed Safestay Edinburgh Cowgate Hostel, in advance of the key summer market this year.
Larry Lipman, chairman of Safestay, said: “This funding improves our flexibility and enables additional investment into the development and growth of our business. Returning to Edinburgh – with its thriving tourism industry – was an important moment for the business after the pandemic, and completing this deal with HSBC UK is the next step.
“It enables us to make investments across our portfolio and resume our plans for expansion into key gateway cities, achieving economies of scale in regions across Europe.”
Elizabeth Davies, head of Hotels at HSBC UK, added: “Since the pandemic, hostels have become an increasingly exciting, growing segment of the hospitality industry, and supporting Safestay’s growth strategy reflects our wider focus at HSBC UK of supporting across the full spectrum of accommodation businesses.”
