SWEDISH FURNITURE GIANT Ikea has revealed plans to develop a hotel chain across Europe, as it looks to find further avenues to showcase its products while also gaining a foothold in the property market.
The chain, which has outlets in Dublin and Belfast, will open its first hotel in Germany next year, and is looking to develop a chain of budget hotels across the continent in competition with other chains like Ibis.
An executive told Germany’s Frankfurter Allgemeine newspaper that the location of the first budget hotel would be revealed in the coming weeks, and said Ikea was in talks with hotel operators to discuss its approach.
The hotels will not carry the Ikea brand directly, but the company will still be heavily invested in the project: it is likely to invest a minimum of €1 billion in the project.
The project will be managed by Inter Ikea, the sister company which owns the intellectual property rights to Ikea’s own furniture range. The Financial Times notes that Inter Ikea last week valued its intellectual property at €9 billion. A separate company owns its retail properties.
Ikea says the budget hotel business is by far the fastest-growing in Europe, with consistent double-digit growth in both bookings and revenue in the last decade.
The company has been keen for some time to expand its operations so that it had interests in property holdings as well as furnishings.
The FT also reports that the chain will consider building student housing complexes across the continent as a further way of both increasing its business empire, as well as offering further ways of showcasing its massive furniture catalogue.
Ikea’s Dublin outlet, in Ballymun, is the largest retail premises in Ireland – and is so large that planning laws had to be amended to allow its construction.
Ikea’s worldwide profits reached €2.9 billion last year.