(Bloomberg) -- CitizenM, a Dutch lodging company, has raised $1 billion in new capital from its existing investors to accelerate its expansion plans as the hotel industry begins to bounce back from the pandemic.
Singapore sovereign wealth fund GIC participated in the round along with Dutch pension fund manager APG Asset Management and citizenM founder Rattan Chadha’s KRC Capital.
More than half of the money is earmarked for adding new hotels, Chief Executive Officer Klaas van Lookeren Campagne said in an interview. The balance of the capital will help the company complete existing development projects and make up for revenue lost during the pandemic.
“It has not been business as usual, but the long-term strategy with our shareholders is unchanged,” van Lookeren Campagne said. “We are patient. We have all gone through many crises in the past.”
GIC acquired a 25% stake in citizenM in March 2019 at an enterprise of 2 billion euros ($2.3 billion). When international travel shut down a year later, the company was gearing up for an expansion spree, with plans to open boutique hotels in cities around the globe.
Early in the pandemic, citizenM executives and its investors discussed whether the company should scrap its long-term plans. Instead they decided to look for opportunities.
Labor and supply shortages have increased the cost of developing new hotels in many U.S. hotels, has made it harder to develop hotels in some U.S. cities, van Lookeren Campagne said. Still, the company will have 24 hotels open by the end of this year, and is aiming for 40 or more by the end of 2024.
“We pretty quickly came to the conclusion that not much will change,” van Lookeren Campagne said. “People will travel maybe a little less frequently, but when they travel, they’ll travel for longer.”
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