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FRANKFURT-The investment by Egyptian tourism company Travco in the Frankfurt-based hotel chain Steigenberger came as a surprise to the German investment community, with the sector still quiet amid the financial crisis, and mainly domestic investors currently active.

The family-held 81-unit hotel chain Steigenberger announced in early August that it has been acquired almost in its entirety by Egyptian tourism company Travco Group International, owned by Hamed El Chiaty and his family. The two parties agreed not to disclose the price, but Travco said its aim is to expand the brand internationally.

The transaction includes the brands Steigenberger Hotels and Resorts and InterCityHotel, but does not encompass its flagship hotel in Frankfurt, which remains in Steigenberger family ownership. A statement said Travco, which also operates hotels and Nile cruise ships, will continue to pursue and further develop the long-term targets of the company.

“The chain has been rumoured to be up for sale for some time, but nothing was really definite until now,” one realtor hotel specialist says. “We are seeing a little more activity now, in line with other asset classes, but until now it has been mainly domestic investors, mostly single asset deals by insurance groups, with foreign investors mainly holding back.”

The Steigenberger family said it is convinced that a strategy it initiated, as well as an improved brand awareness and quality leadership, can be realised more easily with a strong international partner. The hotel chain was founded by Albert Steigenberger in 1930 and developed by his son Egon Steigenberger. It operates 81 hotels in Germany, Austria, Switzerland, Italy, the Netherlands and Egypt. Travco values its assets in excess of €1.25 billion, and owns 43 hotels in Egypt and the United Arab Emirates.

In line with this tradition, Travco is committed to continue Steigenberger’s plans to maintain the German hotel culture, the companies say. “We want to secure Steigenberger’s future in the long run,” says André Witschi, Steigenberger CEO. “In Travco we have found an experienced partner in the hotel industry that fully supports our initiated strategy.”

Steigenberger will be the stepping stone of Travco’s hotel presence as well as its entry into the city hotel business, particularly in the German, Austrian and Swiss markets, and will further strengthen the company’s positioning in quality segments. The two hotel brands will complement Travco’s product and geographical spread, allowing cross-selling opportunities and further economies of scale.

“This is a very important strategic step on our long-lasting and continuous course for growth, which positions us as a global player in the tourism and hospitality industries and allows us to offer an even greater and more appealing value proposition to our customers,” says El Chiaty. “In addition to the clear strategic benefits, we will aim at increasing our joint added-value through accessing new growth opportunities and realizing operative synergies.”

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