KARACHI: Best known for its flat-pack furniture, Ikea is now planning to launch a budget hotel chain in Europe.
The 100 hotels, which will not feature Ikea's eponymous flat-pack furniture nor its brand name, represent the company's biggest real estate development to date.
Ikea follows a trend for cheap-but-funky boutique accommodation driven by low air fares and increasingly price-conscious business travellers.
Demand for trendy yet reasonably priced rooms from austerity-hit business visitors and holiday travelers is soaring, according to Harald Muller, Senior Executive in the property division of Inter Ikea.
“Budget designer hotels is today the fastest developing hotel segment,” he said.
“There is no IKEA furniture in it,” Muller added. “It is not an Ikea hotel. It's a continuation of our normal investment activities in real estate.”
Inter Ikea previously owns a few hotels and has more in the plans, but this venture would be its first chain and will top its 26-acre home, office and hotel scheme around the Olympic park in London.
Müller said the company aims to open hotels in countries where it is already popular, like the UK, the Netherlands and Poland and also strategize to step into new markets like Germany. The Ikea name will not be used for the hotels, which will not be run by Ikea, but rather an established hotelier.
The first hotel is expected to open in Germany in 2014.
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