Amsterdam-based Eden Hotels has a new capital investment plan as well as a new parent company in Zien Group to help accelerate growth ambitions, which includes new brands. Current Eden Hotels CEO Billy Skelli-Cohen, appointed CEO of Eden Hotels in May 2022 with a mandate to build a robust platform for growth and development, will lead Zien Group, which will be based in Amsterdam with offices in London.
About €50 million has been committed to investment into the existing portfolio of hotels that will help further refine the Eden brand as well as create a new brand of individual hotels, initially by re-imagining some of its own assets. In November, Eden Hotels had a portfolio of 14 hotels across the Netherlands and wants to grow across Europe and the UK.
Created by the Dijkstra family some 75 years ago, Denver-based PE firm KSL Capital Partners acquired a majority stake in Eden Hotels in December 2021.
HOTELS recently spoke to Skelli-Cohen to learn more about the trajectory of the group.
HOTELS: Why the reorganization?
Billy Skelli-Cohen: Creating Zien is a strategic move to create an umbrella parent company that will allow us to develop multiple brands and strategies in the future. Zien Group will not be consumer-facing but ‘house’ our different businesses.
H: Can you elaborate on the expansion plan?
BSC: Our first plan is to reinvest in our current portfolio. We will invest in each hotel and also pull certain properties out of the Eden portfolio to create a new brand. In parallel, we are looking for new acquisitions in the E.U. and U.K. to grow the business.
H: What is the branding potential beyond Eden?
BSC: We are planning to roll out another brand under Zien in the near term. We see an opportunity to unify the Eden brand through the planned refinement and then create a new brand out of assets that may no longer fit within Eden.
H: Any new development plans or will you grow via strict acquisitions and conversions?
BSC: Never say never but the core of our strategy is to buy existing single assets, portfolios and businesses in need of repositioning.
H: Will you acquire via partnerships or strictly on your own?
BSC: There is a time and a place to work with a local partner that can add value. The core of our growth strategy is to be a controlling owner/operator.
H: How big and how fast will Zien grow?
BSC: As you know, we are backed by KSL Capital Partners and we share some ambitious growth plans. We live in a very unpredictable market so it is difficult to gauge how fast or how big we can grow. Most importantly, we will be in a great position to take advantage of opportunities in the market.
H: How much money is set aside for growth or what are the expectations for investment in the next three to five years?
BSC: We have already committed over €50 million of reinvestment in our current portfolio. We have significant capital at our disposal for future growth when the right opportunities come along.
H: Do you have any deals in the works?
BSC: Zien will prioritize refining the Eden brand with refurbishments of some properties and creating another brand of individual hotels, initially by reimagining some of our own assets. We are also looking at our first few new opportunities in parallel.
H: Is there potential for portfolio acquisitions?
BSC: Single asset and portfolio acquisitions are both part of our strategy. Adding to the portfolio is a question of relationships, discipline and patience. I believe the mergers-and-acquisitions ecosystem remains large, and my network, and relationships formed by KSL internationally and the Dijkstra family domestically and regionally will help tremendously. We’re proactive about what brokers are putting out there in the market, and we are also working hard to generate opportunities.
H: Will Zien consider strict management opportunities?
BSC: No.
H: Describe the level of KSL’s role? Is there anyone from KSL on the exec team?
BSC: KSL acquired the majority stake in the group in December 2021. They are our main investor along with the Dijkstra family, who kept a minority stake. Drew Heimbrock, who joined us from KSL Capital Partners, is part of Zien’s leadership team and our director of Strategy, Mergers and Acquisitions.
H: How might macroeconomic conditions impact on plans – positive or negative?
BSC: The current portfolio is mostly underpinned by high-quality assets in Amsterdam, which is a market we strongly believe in the medium to long term. It is hard to see how the markets will not be difficult to navigate in the near term with some sort of recession looming and this will likely present some opportunities we wouldn’t have seen without market instability.
H: How has the portfolio been performing in 2022 and what is the forecast for the group?
BSC: 1Q22 was difficult in the Netherlands with the COVID shutdown. Since the market fully reopened in Q2, business has been much better than expected with significant ADR growth and NOI levels above 2019 results.
H: Where will the focus be placed to optimize the current portfolio?
BSC: Optimizing the portfolio is a continuous game of sweating the details to provide a better environment for our staff and better experiences for our guests, but we have three key focus areas here:
- Our number one responsibility is to invest in our people and their development
- We are committed to spending over €50 million in the current portfolio
- We will reimagine all our systems in the next 12-18 months