Global hotel chain collapses after being valued at $1.8 billion

It had over 100 hotel sites across the world and was once valued in the billions, but has now found itself in trouble.

A global accommodation chain, which was once valued at $US1.2 billion ($A1.8 billion), has collapsed.

The company called Selina Hospitality, offered ‘flash’ backpacking accommodation and shared workspaces particularly aimed at Gen Z and millennial travellers, as well as digital nomads across the world.

The global chain launched in 2014 but since then its reach had exploded with more than 100 hotel sites in Australia, the US, Mexico, the UK, South America, Portugal, Morroco and Thailand.

It once boasted it was the “world’s largest hospitality brand” which worked with “local artists, creators, and tastemakers, breathing new life into existing buildings in interesting locations in 25 countries on six continents – from urban cities to remote beaches and jungles”.

It listed on the New York based stock exchange in 2022 with a market value of $US1.2 billion ($A1.8 billion),

But its value has plummeted to just $US21.5 million ($A32.8 million) after it shed 99 per cent of its value.

A global accommodation chain, which was once valued at $1.2 billion, has collapsed after revealing it is unable to pay its debts. Picture: Facebook

It’s fate was sealed when the company releasing an alarming message to the stock exchange.

“The board of directors of the company has resolved that the company no longer has any reasonable prospects of avoiding an insolvency,” it said.

“The board now believes that all alternative options have been exhausted.”

Selina Hospitality has appointed Andrew Johnson, Samuel Ballinger and Ali Khaki from FTI Consulting LLP as joint administrators.

“The joint administrators do not have funding to provide ongoing support to the company’s operating subsidiaries,” the company’s stock exchange statement continued.

“The joint administrators are exploring all options available to the company, which may include a sales process of some or all of the operating subsidiaries and other assets of the group, subject to the joint administrators obtaining the necessary funding to run such a process.”

As a result, Selina Hospitality will also be delisted from the Nasdaq.

News.com.au has reached out to Selina Hospitality for further comment.

It had more than 100 hotel sites in Australia, the US, Mexico, the UK, South America, Portugal, Morroco and Thailand. Picture: Facebook

Selina has keen to attract digital nomads. Picture: Facebook

However, the Australian operations remained unaffected by the parent company’s collapse.

It offers backpacker accommodation including two in Melbourne, one in Brisbane and one on Magnetic Island near Townsville which was the last to be opened and comes with 145 bedspaces available, including powered caravan sites and private room options.

“We are so excited to add Selina Magnetic Island to our portfolio. It marks the fifth hotel we have opened this year in the APAC region, fourth property in Australia, and our first truly remote experience in the region,” said Selina’s managing partner of South East Asia, Australia, and New Zealand back in 2023.

The accommodation provider launched into the Australian market just two years ago and had hefty ambitions to expand to 40 sites in the country as well as New Zealand.

Aerial view of Balding Bay on Magnetic Island, QLD, Australia. Picture: iStock

The Australian arm continues to operate partly because it isn’t wholly owned by the parent company with Osprey International Limited taking a share earlier this month. News.com.au has reached out the shareholder company for comment.

It comes at a time where Australian business in general are battling with tough economic conditions with a list of collapsed companies mounting.

Figures from the Australian Securities & Investments Commission (ASIC) revealed there were just over 11,000 insolvency appointments in the 2024 financial year, skyrocketing by 39.1 per cent increase in the year prior.

The appointments had also soared by a massive 124 per cent more than 2022.

Hospitality has been hard hit around the world. Picture: Facebook

The insolvency figures even top that of the GFC when close to 10,800 businesses failed.

With big names like airline Bonza, online retailer Booktopia and vacuum cleaner outfit Godfreys already failing this year, there are warnings that more high profile names will go under in 2024.

However, the construction sector led the pile of casualties with the highest number of insolvencies in the 12 months to June 30 adding up to almost 3000.

Accommodation providers and food services were the second biggest industries to feel with the pinch with almost 1700 businesses collapsing.

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