Panama-based hospitality brand Selina has embarked upon a greenfield investment spree following a successful round of funding in April 2018 which raised $95m from private equity firm Abraaj Group and WeWork founder Adam Neumann. Selina is in the top 20 most active global investors in 2018 in terms of project numbers, according to fDi Markets.
Selina invested in eight greenfield projects in Argentina in mid-2018, in cities such as Palermo, Rosario and Mendoza, according to fDi Markets.
Elsewhere in Latin America, Selina is set to enter Bolivia, Peru, Brazil and Ecuador. The company entered Porto in Portugal in September 2018, and is setting its sights across other European countries. Selina aims to open 40 locations globally by 2019 and has nine upcoming locations advertised on its website, including a first hotel in the US in Miami.
Founded in 2014 by two Israeli businessmen, Selina is positioning itself as the co-working hotel chain of the future. Its holistic and unusual approach to hospitality has allowed the company to rapidly expand from one location in Panama to 29 locations across nine countries.
Selina hotels target millennial travellers through innovative design while also attracting customers it dubs as “digital nomads” – people able to work remotely in a destination of their choice. The hotels offer a wide range of accommodation options – from affordable dormitories to large personal suites – alongside co-working spaces, social areas and group activities.
In 2017, about 1.27 million people used co-working spaces worldwide. The US start-up WeWork has 477 co-working office spaces in 95 cities worldwide advertised on its website and was recently valued at $20bn, thereby showcasing the lucrative potential of changing work spaces.
WeWork is currently the world’s most active foreign investor in 2018, undertaking 170 greenfield FDI projects across 30 countries, including 33 projects in both China and across Latin America, according to fDi Markets. This marks a 161.5% increase from the number of projects WeWork made in 2017.
The second and third most active investors are in the co-working space, namely IWG (formerly Regus) and Spaces, respectively. Regus acquired the Dutch company Spaces in the first quarter of 2015 in order to compete with WeWork’s growth within the market.
While the majority of Selina’s projects involve repurposing old buildings into co-work hotels, its recent undertaking of greenfield FDI projects, and growing interest in co-working, suggests that further expansion in this space is likely.
The emergence of Selina confirms the persistent changing tides within the hotel and tourism industry. The US start-up Airbnb has heavily disrupted the hotel industry worldwide.
The growth of Airbnb, which is valued at $30bn just 10 years after its formation, illustrates the profitability of mastering a niche within the tourism industry and scaling it worldwide. If Selina succeeds in rolling out its unique model, another new force in the hotel and tourism sector may be crowned.