Safestay has signed its first franchise agreement as part of its growth strategy, focusing on capital-light expansion.

The franchise agreement was signed with hostel owner Sycomore Entwicklungen to operate under the Safestay brand and systems.

The agreement encompasses two hostels in the Austrian alpine resort of Kitzbühel.

With effect from 1 September 2025, the agreement will initially last for five years, with an option to extend for an additional five years.

The two properties, currently known as Roomie Alps Design Hostel Kitzbühel and Guesthouse Johanna hotel, will be rebranded as Safestay Kitzbühel Centre and Safestay Kitzbühel Alpine, respectively.

Together, these two properties will offer 70 beds in Kitzbühel and are located near ski lifts and other local amenities.

Based on the terms and conditions, Safestay will receive guaranteed fixed annual payments and performance-based fees, including commissions for direct bookings via its own platform.

The rebranding process will adhere to Safestay's brand standards and to be executed by Sycomore.

The franchise model allows Safestay to expand with reduced capital requirements, leveraging its international brand and marketing reach.

Both the Safestay Kitzbühel Centre and Safestay Kitzbühel Alpine will be incorporated into Safestay's sales and marketing platform, allowing them to leverage the company's operational expertise and IT infrastructure.

Sycomore will be able to access support services such as HR, recruitment, and yield management via Safestay's commercial hub in Warsaw, Poland. This integration aims to increase direct bookings and reduce reliance on online travel agents.

Safestay chairman Larry Lipman commented: "Our first franchise agreement is an exciting opportunity for Safestay as we continue to execute against our ambitions to double the size of our portfolio over the medium term.

“Whilst we continue to see significant white space for Safestay in a great number of European city centres, we are excited to take Safestay to a much sought-after alpine resort and introduce the brand to different travellers and new customers.

“These two sites have great potential and will benefit from our leading brand and well-invested infrastructure. We look forward to demonstrating the attractiveness of the franchise model and exploring further similar opportunities for growth.”

Sycomore Entwicklungen managing director Nikolaus Kramhaller added: “Our properties are in excellent locations and will benefit from Safestay’s brand and operational expertise as we elevate our offering at Safestay Kitzbühel Centre and Safestay Kitzbühel Alpine.

“This opportunity will allow us to utilise Safestay's established infrastructure and proven systems, while also providing Safestay with an excellent opportunity to expand. It is a strategic win-win that will enhance our guest experience while strengthening Safestay's presence in one of Europe's most desirable mountain destinations."

Safestay’s collection includes 20 hostels and one hotel, providing travellers with a choice of private and shared accommodations in key destination cities across the UK, Spain, Belgium, the Czech Republic, Germany, Greece, Italy, Poland, Portugal, and Slovakia.