Selina's ride on the public markets has been a roller coaster, but one its co-founder and CEO, Rafael Museri, would not want to jump off.
The hybrid, alternative, experience-driven accommodation brand's ride began when it went public via SPAC in October 2022. Listing on the New York Stock Exchange while the economy starts to crater, then seeing your share price rise 442% before plunging below its debut amount would be enough to put someone off, but not Museri. In fact, he said he'd do it all again.
“I believe that in the middle of 2023 the market will come back and I'm ready to be part of it,” Museri said in an onstage interview at the recent Israel Hotel Investment Summit in Tel Aviv.
Growing at speed
Selina was formed back in 2014, and the company’s portfolio now includes 163 open or secured properties across 25 countries and six continents.
Growth is coming at lightning speed. “We're opening a new Selina about every 10 days,” Museri said.
Scale and authenticity don’t usually go hand in hand but Selina thinks it has found a way, thanks to a couple of unusual tactics.
One of them is a piece of technology Museri calls a “distressed asset finder.” Selina can map an area in a few hours, pick out the most distressed and underutilised hotels and work out the GOP to understand what the current owners are making.
Eighty percent of Selina’s hotels are coming off market, as Museri puts it. “JLL is not calling Selina every day,” he said.
Selina’s sweet spot is a family-owned property with 50 to 100 keys.
Real estate strategy
On the real estate side, Selina tends to work with local partners who know the market. In Israel, for example, it worked with Hagag Group and in the UK it teamed-up with Aroundtown and Altshuler-Shaham Properties to acquire a $40-million portfolio of hotels.
“We have a local partner, real estate institution in every country around the world that funds our growth. So Selina has no CapEx out of the balance sheet at any point,” Museri said.
Selina either leases from these local partners or does a deal directly with the small family-run hotels it likes to target.
That’s how Selina is able to grow so fast, but how does it keep the authentic vibe that makes it chime with millennial and Gen Z travellers?
Getting the right look for each of its properties is a surprisingly in-depth endeavour. Selina sources vintage and discarded furniture all of the time and 70% of its FF&E is upcycled. A lot of it gets sent to a warehouse in Jaffa, Israel where artists work on restoring individual pieces. “We're paying probably 30 cents on the dollar on a piece of furniture,” Museri said.
Selina currently has around 40 hotels in development with more than 800 artists inside them—helping to get them ready to open. The company averages 90 days from the moment it buys or leases until it opens.
“It's 100% cosmetic, we're not builders. We're not good in construction. It's not our thing,” Museri said.
Selina’s brand aesthetic is what has drawn interest from consumers and other hospitality businesses. Museri, however, is adamant that he doesn’t want to sell, which was why he went down the SPAC route.
“We were approached by many of the big brands to be acquired,” he said. “We had many conversations with many groups that basically tried to build those concepts for the young generation. They didn't make it right. And we realized that it's all about the culture... either that's your essence or not.”
On the one hand, Selina, like most other travel and leisure companies, was hurt by the COVID-19 pandemic but it is also likely to be a beneficiary from the way repeated lockdowns have changed the way people think about work.
In 2020 Selina bought Remote Year, a company that offered participants the chance to live and work in a new city each month. Selina has now expanded the concept offering various extended-stay programs and memberships, including its CoLive product.
“There are over 5,000 people that pay Selina a monthly rent… they have a key and a desk all around the world. So if they meet a friend and they're in Portugal, now they want to do a road trip in Portugal. They're staying in Selina, Portugal, they have full flexibility. If they have fun, they want to stay for more days. They want to move to another because there are great waves today and they want to surf and then a friend says, ‘Hey, you have to come to Morocco, there is a great festival,’ they move into Morocco. So basically they're paying a monthly fee. And Selina is their home globally,” Museri said.
Crucially for Selina, it was able to develop its membership platform during the pandemic, which helped it keep going when travel was prohibited or severely restricted. Revenue dropped by 97% in one day but a couple of months later the company was able to go live with its CoLive product, which helped it generate cash in an incredibly lean period for the industry.
Selina has also branched out into the experiential side of travel, an area Museri sees as integral to the company’s future. The aim is to create as many reasons as possible for someone to come and interact with the Selina brand.
At the Tel Aviv Beach property, there is a surf club, a dance studio a wellness centre, co-working space, a rooftop, a coffee shop and there are plans for a 400 square meter event space.
“If you look at this entire box, it's a box that gives about 20 different reasons for people to walk in the box and out the box, which are not hotel guests,” Museri said.