BRITTANY, FRANCE-Investment firm Eurazeo has sold the223-property B&B Hotel Group, based here, to the Carlyle Groupfor $654 million. The collection of budget hotels across sixcountries amounts to 16,162 rooms.

The B&B company was started in 1990, and operates at thehigh-end of the low-cost hotel segment, primarily in France,Germany and Italy. Carlyle officials said the firm intends toexpand the company by investing in the continued renovation ofcurrent hotels and by accelerating the property’s opening pacethroughout Europe. The buyer plans to penetrate further into thecore French markets, and significantly expand in Germany (whichaccounts for only 34 properties) and in Poland, Portugal andHungary.

According to Carlyle officials, the budget hotels sector hasproven to be highly resilient, having increased average daily rateby at least 4% every year since 1999 and grown revenue peravailable room by 2.9% a year. This compares to the entire hotelindustry averaging 0.5% RevPAR per year for the past 10 years.