Amsterdam-based Cycas Hospitality has quietly grown its hotel, extended-stay and dual-branded portfolio in the United Kingdom, with a handful of mainland European assets. Now it is embarking on further expansion in the U.K., Germany and France.
AMSTERDAM—Eduard Elias, founder and managing partner of Cycas Hospitality, said the firm has great ambition for the next four years.
The Amsterdam-based hotel management company concentrates on full-service and extended-stay hotels. It also places great emphasis on operating dual-branded hotels; Elias calls these boxes “double-decker” hotels.
“This year is our 10th anniversary,” he said. “We started pioneering branded extended-stay hotels and now have brokered more than 3,000 rooms. The hotel sector in Europe, still in its infancy, has enormous potential compared with the U.S.
Wherever his company opens an extended-stay hotel, they instantly mature and run at high occupancy, he said, adding that the demand is there.
Eduard Elias, founder and managing partner, Cycas Hospitality
“There also is great potential for dual-branded hotels combining transient and extended-stay demand. They are two hotels, with separate entrances and experiences, targeting two different clienteles but both having a genuine customer experience,” he said. Wherever his company opens an extended-stay hotel, they instantly mature and run at high occupancy, he said, adding that the demand is there.
He cited one of the company’s recent projects, a dual-branded project in Manchester, England, consisting of a Crowne Plaza and a Staybridge Suites.
“They have great synergy. Cost savings are 10% to 15% of operations,” Elias said.*
“The majority of our hotels are extended stay. Double-decker hotels allow us to align our interests with regular hotels, but extended stay will always be our focus,” he said.
Partners and growth
Cycas’s hotels are partnerships with a broad range of hotel chains, Elias said.
“Our ambition has always been to be a partner with a wide range of brands,” he said. The company’s core business, he added, is as a white-label operator working with all brand families.*
“We look to see what brands would work, as there is a lot of choice and all have different characteristics,” he said.
Elias said there is space for white-label operators in Europe.
“There are fewer of them in Europe than there are in the U.S., but competition is coming, and I see consolidation,” he said.
Elias said Cycas has another ambition—to have up to 4,000 rooms in Germany by 2022.
“Germany is competitive. A lot of operators are present, but it is also fragmented,” he said. “There are not as many international-branded hotels there as in other markets, and we will go where the business demand is. That can be tertiary cities, too.”
“We have grown the team over the last three months to gear up and facilitate the growth ambition we have. The majority of our rooms are in the United Kingdom, and our focus remains on the U.K., as well as Benelux, France, and Germany. We have just signed three hotels in France, including a double-decker Hyatt Place-Hyatt House in Paris,” Elias said.
“Markets such as Italy also have great opportunities, due to the high incidence of family owners, but it is not an active search for us,” he said.
Elias said Cycas employed hotel management agreements, leases and joint ventures.
“Currently, the majority of our hotels are HMAs, but most in the pipeline are leases,” Elias added. “Market to market, we adjust ourselves.”
One recent partnership is the October 2016 agreement with private equity firm Starwood Capital Group to operate four extended-stay assets in London with a total of 640 keys.
Inspiration does derive from the U.S., Elias said.
“We look very much at the U.S. when we look at brands. Trends come from there, and we took ideas from there when we became a white label,” he said.
Elias’ criteria for new builds are that sites have to have at least 100 rooms and a minimum gross surface area of 6,000 square meters (65,583 square feet), he said.
“I believe our hotels will cater to millennials. The forecast in 2020 is that 50% of business travelers will be millennials, and I think extended stay will very much cater to that sector. This is their way of travelling,” Elias said, who added he thought “Airbnb is a blessing in disguise as it opens a new market and new way of travel.”
Cycas puts emphasis on having its own design team.
“What we have done in the past with most of the hotels is to have excellent in-house teams in place during construction and design. We are not developers; rather, (we) work with local ones to limit risks and make sure products accord with brand standards,” Elias said.
“This is one of the things I believe makes us special, and we can add alignment and value to the construction cost. We are also involved in refurbishments,” he said.
“Value-add is so important,” Elias added.
*Clarification 15 October 2018: This article has been updated to clarify a comment regarding the company’s brand focus.
*Correction, 16 October 2018: This article has been updated to correct an incorrect data point related to cost savings at dual-brand hotels.