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Ikea furniture chain announces plans to open a budget chain of some 150 hotels with the US group Marriott to be called Moxy
It has given homes around the world the Billy bookcase, the Poang chair and the Lack floating shelf. Now the Ikea furniture chain is aiming to create a home from home with a chain of budget hotels across austerity-gripped Europe.
The hotels, being developed in collaboration with the US group Marriott and to be called Moxy,– unconnected to the 1970s Toronto rock band of the same name – promise to offer "contemporary stylish design, approachable service and, most importantly, an affordable price".
The first hotel will open near Milan's Malpensa airport next year, with rooms priced at €60 (£52) to €80 a night, but Ikea is targeting further locations in cities across Europe.
Guests will not be drifting off to sleep on a simple Sultan (Ikea-speak for mattress), snoring into a Gosa (pillow).
The furnishings in guests' rooms will not come from Ikea, though they will reflect the no-frills price of a night's stay, Marriott chief executive, Arne Sorenson, told reporters as he unveiled the new brand at a hotel conference in Berlin.
Instead, according to an official statement, "guest rooms will be functional and well-designed, with upscale bath amenities … The colour palette features calming neutral tones reminiscent of rich brown leather, combined with natural materials to evoke an organic, comfortable and restorative feel."
Marriott hopes eventually to join forces with other investors, increasing the Moxy chain to 150 hotels with between 25,000 and 30,000 rooms. "We could be a number of multiples of that size over time," Sorenson said.Neither will Ikea be transferring the bold colour scheme of its retail brand to the bedroom. While the foray into the budget hotel market of easyJet's founder, Stelios Haji-Ioannou, easyHotel.com, has used the group's signature bright orange in its rooms, there will be no Ikea blue and yellow at Moxy Hotels.
In fact – unlike Ikea's BokLok concept homes, 57 of which the retailer has built in Gateshead– there will be very little in the 50 Moxy hotels Ikea is to open over the next five years that will give away a link with the flat-pack furniture group.
The UK, where established budget hotels such as Premier Inn and Travelodge have been expanding rapidly for years, is expected to be a key target market, with Moxy openings likely in London, Edinburgh, Cardiff, Liverpool, York, Inverness and Cardiff.
Ikea's property division owns large amounts of development land in cities across Europe. In London, it won approval last year for the redevelopment of a 10-hectare plot in Stratford, close to the Olympic site, called Strand East. It has talked of a 350-room Marriott hotel forming part of these plans, alongside 1,200 homes, 58,000 square metres of office space, yoga studios, shops and a creche.
Ikea's involvement in the Moxy project is as a property investor, using the financial might of the store group to help fund the ambitious plans for Moxy.
Peter Andrews, managing director of Ikea's property arm, said: "This gives us a great opportunity to use our development expertise to build a high-quality hotel property investment portfolio."
The new venture is by no means Ikea's first experiment beyond the stores for which it is best known. Inter-Ikea, the holding company behind retail operations, also has a financing division with investment valued at €2.3bn. The group's property arm has a sprawling European land bank, with real estate in the UK, Spain, Belgium and Poland.
Ikea's property division is also planning to diversify into student accommodation in major university towns in the UK, Germany and Belgium.
The business, founded in Sweden by Ingvar Kamprad, is now headquartered in the Netherlands and remains privately owned, rarely opening up to publicity.
Kamprad's fortune is estimated at $3.3bn (£2bn) by Forbes magazine. The figure is considerably less than it was some years ago after his lawyers produced documents proving he had got rid of his stake in the business decades ago.
The sprawling empire is owned by a not-for-profit foundation based in the Netherlands.