(Sharecast News) - Hostel operator Safestay has inked its first management contract to run the resort-based 120-bed Calpe Seafront Hostel on Spain's Costa Blanca.
Safestay said on Wednesday that it was "well positioned" to take over the hostel's management and incorporate it into the group's booking system. The management contract was said to be for an initial 20-year term and noted that it "should form the template" for further management outsourcing transactions.
Under the management contract, the AIM-listed group will receive a fixed management fee plus a percentage of revenue and profits above certain levels.
Chairman Larry Lipman said: "We are excited about the addition of the Safestay Calpe Seafront on the Costa Blanca in Spain to our portfolio of upmarket hostels across Europe. This is the first management contract signed by Safestay and we are already discussing other similar opportunities with the aim of adding an asset-light portfolio of hostels to sit alongside our expanding freehold and leasehold portfolio. Safestay Calpe Seafront, while different in being resort based, is a unique hostel which will fit naturally into our network. I believe it will be a strong addition alongside our new Edinburgh hostel, which is also opening in June."
As of 0910 BST, Safestay shares were untraded at 19.0p.
Reporting by Iain Gilbert at Sharecast.com
Safestay (SSTY)