Selina Co-Founder Rafael Museri thinks he has developed a better process and created a timely concept perfect for today’s hospitality landscape. Now, the asset light, alt-lodging lifestyle and experiential hospitality brand targeting Millennial and Gen Z travelers is off to conquer the world with a goal to grow in just about everywhere corner of the world.
Currently with 144 properties open or secured properties across 25 countries, Museri told HOTELS last week that 80% of Selina deals are signed off-market and come directly from Selina’s development team because of proprietary technology that identifies the most distressed and underutilized assets in a marketplace. “We believe that once a deal goes to bid and you have five traditional, big hospitality players bidding the price is going up and up,” Museri said. “I’ve seen that with my own eyes – how every bid increases the price. And I didn’t feel that I wanted to compete in this specific area.”
Instead, Selina, founded in 2015, uses its technology that Museri said allows them to map and identify those distressed assets in any market within four or five hours. “My teams can go directly to those landlords, negotiate a deal and close it,” he added.
Then, on the funding side, Selina creates relationships with local real estate experts who know the landscape and can find local partners to fund 90% of the conversions with already reduced transaction costs.
Next comes partnerships with local artisans, who embed a local cultural influence, to create destinations that combine the comfort and style of a boutique hotel with coworking facilities and the social experiences of a retreat or festival, driving significant increases in revenue compared to a property’s prior operations. This is the focus, Museri said, to attract Millennial and Gen Z travelers, who spend approximately US$350 billion per year on travel, according to Selina estimates.
HOTELS will feature the entire interview with Museri in an upcoming story and in its March/April issue.
Perhaps this secret sauce is what led to an early December announcement that Selina was going public via a SPAC through a merger with BOA Acquisition Corp. The combined company is expected to have an equity value of approximately US$1.2 billion. The deal is expected to close in the first half of this year, according to BOA CFO Ben Friedman, who explained to HOTELS what attracted him to the opportunity.
“Capitalizing the company is going to allow Selina to not only open individual assets, but explore portfolio transactions, and potentially strategic M&A that would expand the footprint of this brand,” Friedman said. “And we firmly believe that this can, and will, be one of the largest hospitality companies and lifestyle and experiential brands globally. Our hope is to compete with all facets of the hospitality space just about everywhere in the world.”
On Friday, some of Museri’s and Friedman’s boasts were backed up by an announcement that Selina had a record month in December, opening six new destinations and soft launching an additional six locations. This represents the highest-volume month of openings in the company’s history at a pace of three per week.
Collectively, these new locations add more than 2,800 beds to Selina’s global network of hotels for remote workers and digital nomads and advance the brand’s global expansion, marking its entrance into the new markets of Uruguay, Australia and Thailand. Of the 12 locations, four are in Israel, three are in Brazil, and the others are located in Panama, Argentina, Uruguay, Australia and Thailand.
With these new openings, Selina’s hotel platform has grown across five continents, including North and South America, Europe, the Middle East and Asia Pacific, of which 90 are open and operating.
Selina also reported it saw an acceleration of sales throughout fiscal year 2021 and expects to exceed its 2021 revenue forecast of US$93 million.
With the pending SPAC, the business combination provides US$285 million in gross cash proceeds, including US$70 million in capital commitments comprising PIPE investments from institutional investors, including South Light Capital (an affiliate of DigitalBridge), MORE Investment House and Sir Ronald Cohen, alongside PIPE and backstop commitments from BOA’s sponsor and founder-led shareholders.
Proceeds will allow Selina to fuel international expansion, invest in proprietary technology, and attract and retain high-quality talent.
Selina expects to be EBITDA positive by Q1 2023 and generate approximately US$1.2 billion in revenue by 2025.
Further elaborating on Selina’s success, Museri said Selina has always relied on local people to tell them where they should build next based on where they want to travel. “That’s how we build the roadmap,” he said. “So, when COVID hit and people were traveling in their own countries, Selina became one of the most attractive platforms for them. Overall, for us, COVID just made the brand and our business model even more relevant than ever. And our forecast for 2022 is we’re definitely going to more than double our revenue.”
Friedman said that to see a company perform at such a high level and to be able to take advantage of this shift in hospitality from traditional to more lifestyle and experiential, and to be targeting a subset and a demographic that was underserved in the broader space made this a really attractive business combination. “We’re incredibly encouraged by the performance we’ve seen in 2021 – from the investment we’ve seen and the customer engagement we’ve seen across the board,” Friedman said. “We expect that to continue. As we start to see COVID dissipate and restrictions on travel dissipate, 2022 should be an incredibly exciting year for Selina.”
Museri added that Selina is opening new units almost every two weeks and just opened for the first in Southeast Asia. “We have started signing and building in new, exciting countries such as Morocco, Thailand and Spain. We kept expanding in 2021 in countries that did great during COVID. For example, when we realize that countries like Portugal, Israel, Mexico and countries in Central America were doing great during COVID, we just shifted our technology towards those countries to identify the best asset for us. Quickly, we grew within the same year in those countries. That level of flexibility that exists in Selina today is very difficult to find in the hotel industry – the ability to realize in February 2021 there’s something very interesting happening in domestic travel in Mexico, Costa Rica and Portugal, for example, and within two months nail another five or six new locations in those countries, and three months after to open them and generate great revenue, profitability and deliver a great experience for the brand. That’s what we did in 2021. We listened to the customers, took quick decisions, shifted technologies and moved.”