We all know that ground-up developments have been incredibly challenging to get going in the wake of Covid and the myriad geopolitical issues that have erupted since 2020. This is especially true in Europe where space is at a minimum and governments are strict when it comes to construction.
Given all those issues it’s always impressive to see a project come to fruition and that is why Vienna House Easy by Wyndham developed by Mamma Group was the worthy winner of the inaugural Pitch Perfect award at IHIF EMEA this year.
We recently caught up with Herbert Pinzolits the owner and CEO - Mamma Group to discuss the hotel.
Hospitality Investor: Could you briefly describe the development?
Herbert Pinzolits: Mamma Group is developing a 510 key hotel in timber at Vienna airport.
In terms of rooms it will be the largest hotel made from wood in the world (at least our research did not bring up any bigger one).
And the largest hotel at Vienna airport and the fourth largest in Austria.
We are focussing on the highest level of sustainability and expect to be awarded a gold certification according to DGNB.
Due to the high extent of prefabricated wooden elements construction time will be a record 14 months from breaking ground until turn-key delivery (FF&E included).
Hospitality Investor: What factors influenced you in choosing this particular project?
Herbert Pinzolits: Vienna airport decided in 2018 to tender a third hotel on the airport grounds - besides an NH (since 1990) and a Moxy (since 2017).
The main reason for it was that Vienna airport at that time had by far the smallest supply of hotel capacity in relation to passenger traffic compared to similar sized airports in Europe
Since then the undersupply has widened because the traffic in Vienna grew by one third to almost 32 million in 2024 while the number of hotel rooms remained the same.
We were lucky to win this contest in 2019 with a comprehensive sustainable approach. So in fact we were chosen for the project.
Hospitality Investor: How did you decide on the brand and operator?
Herbert Pinzolits: In March 2020 we were two weeks away from signing a lease agreement with a German hotel operator and Accor for the first new-built Greet hotel in Europe.
Soon later airports and hotels were ordered to close around the world and the ready-to-sign contract died.
The project came back to live two years later when we restarted our acquisition efforts. Eventually five operators were competing for the lease.
We decided to go with the German HR Group and Wyndham Hotels and Resorts as our partners because they offered the best fixed-lease terms and last but not least we were able to realize the first Vienna House hotel in Vienna.
Hospitality Investor: What was the biggest challenge you had to overcome?
Herbert Pinzolits: In fact it seemed in 2020 and 2021 that our project would not be realized for a long time if ever.
Back then airports were not sexy, hotels were not sexy and airport hotels were the last thing people were looking for.
Fortunately this changed surprisingly fast in the course of summer 2022 so that eventually we ended up with five strong offers from different operators.
After overcoming the Covid crisis and signing a lease contract in December 2022 the reverberations from the Ukraine war hit us (as any developer in Europe).
So exploding construction costs, steeply rising interest rates and consequently plummeting asset valuations were the next challenges we had to master before we broke ground in October 2023.
Hospitality Investor: Was financing the build straightforward?
Herbert Pinzolits: Of course not. When we approached banks with this project in autumn 2022 we understandably encountered cold shoulders.
But also this changed quickly until summer 2023. Eventually we had three viable offers for a project loan.
We certainly had to settle with a significantly higher equity injection as well as tripled interest rates which hit our margin but at least we were able to start construction within the given schedule.
Hospitality Investor: Is there anything you would do differently if you had to start again?
Herbert Pinzolits: Not really since the turbulent times we cruised through did not leave us many choices. And fortunately under all the givens restraints the outcome is very satisfactory.
It is the first time we have used timber in an hotel project. And given its massive size we were a bit cautious with the new material. But in hindsight it was the best decision in terms of precision, speed as well as costs. As an example: Once the ground floor was finished it took us four months to put five floors and 510 rooms on top including all windows and bathrooms.
Hospitality Investor: When will the hotel open?
Herbert Pinzolits: We will pass over the fully equipped hotel (exclusive OSE) the REVO (formerly HR Group) on November 17. It will then be up to then if they open it before Christmas or in January.
Hospitality Investor: What are you working on at the moment?
Herbert Pinzolits: Currently we are pursuing four hotel projects. The other three are a luxury resort in the Wachau wine region (a 45-minute drive from Vienna), where we turn a castle located right at the banks of Danube river in a stylish and modern hideaway with the help of Matteo Thun architects, Milan. It will accommodate 127 rooms, two restaurants, an event hall, a separate spa villa, a big delicacy and wine store and a few other distinctive features.
Construction is about start this September, the opening is scheduled for May 2027.
Another project is a 140 key midscale hotel in Schweinfurt, an industrial hub in Northern Bavaria (between Frankfurt and Nuremberg). We obtained the last permit a few weeks ago and are now ready to start the tendering.
Finally we just secured a prime location right in front of the Vienna Central train station recently. Now we are structuring a project for 135-140 key budget lifestyle hotel with authorities and our architects.
And of course as a developer we also want to sell hotels we have completed and which already operate. So there are two assets we test the markets right now.
Pitch Perfect will be running at R&R later this year. To find out more please contact Julie Rey-Gore: jreygore@questex.com