Generator Hostels Targets Mid-Market Hotels for Expansion

European hostel brand Generator is embarking on an aggressive growth plan under the leadership of newly appointed CEO Xavier Mufraggi, who took the helm in July. The company aims to double its current 15-property portfolio by 2030 by acquiring and converting distressed mid-market hotels into affordable yet stylish accommodations that appeal to budget-conscious modern travelers.

Mufraggi told Skift that properties under brands such as Novotel, Mercure, and Holiday Inn are increasingly facing operational headwinds and are widely available for acquisition. He noted that the primary challenge is not locating these assets, but rather securing them at the right price point. This expansion follows Brookfield Asset Management's acquisition of Generator in May 2025 for roughly 776 million euros, with the first conversion already underway at the Novotel London Greenwich.

Generator's conversion thesis highlights a clever adaptation within the post-pandemic hospitality sector. By utilizing existing four-star hotel skeletons, the company drastically cuts heavy construction costs while introducing high-density dorm rooms that maximize revenue per square meter, bridging the gap between traditional budget hostels and lifestyle hotel brands.

The appeal of utilizing four-star hotel buildings lies in their structural layout, which requires minimal architectural alterations. Mufraggi explained that these properties allow them to seamlessly install four to five beds per room while retaining private amenities, offering nightly rates around £40 per bunk—positioning themselves just below aspirational lifestyle brands like Hoxton and Moxy.