Generator Hostels Targets Distressed Mid-Market Hotels to Double Portfolio by 2030
Generator Hostels, under new CEO Xavier Mufraggi, plans to convert distressed four-star hotels like Novotel and Holiday Inn properties into premium hostels, charging around £40 per bunk. The company, acquired by Brookfield Asset Management in May 2025, aims to double its 15-property footprint by 2030, with the first conversion already underway at Novotel London Greenwich. Mufraggi noted that many mid-market hotels are available at the right price, making them attractive for conversion without major structural changes.
Brookfield Asset Management's acquisition of Generator for roughly €776 million signals a significant bet on the hostel segment's resilience amid broader hotel industry turbulence. The Greenwich conversion represents the template: taking an existing four-star property and reconfiguring rooms with multiple bunks rather than undertaking costly renovations. Mufraggi's strategy hinges on the current oversupply of struggling mid-market properties, with many owners eager to offload assets at favorable valuations. The company's existing European portfolio provides operational experience in running large-scale, design-forward hostels that appeal to budget-conscious travelers seeking more character than traditional budget hotels offer.
This strategy could reshape the mid-market hotel landscape, potentially accelerating the conversion of struggling four-star properties into budget accommodations. Younger travelers and cost-conscious visitors may gain access to prime urban locations at roughly £40 per night, expanding affordable travel options in expensive cities. However, the shift could also reduce traditional hotel room supply, potentially affecting business travelers and older demographics who prefer conventional hotel amenities. Local tourism economies may benefit from increased visitor capacity, though the long-term effects on employment patterns and neighborhood character remain uncertain.