Starboard Hotels has entered a joint venture agreement with Union Hanover to launch a chain of luxury hostels called Hoax.
Hoax Liverpool, which is set to open opposite the Cavern Club in Liverpool in July, will become the first in a group of hostels in key tourist cities throughout the UK and Europe. It will incorporate a Brooklyn-style restaurant called and Hopskotch Street Kitchen and Bar.
Funded by property investment firm BridgePoint Ventures and IPIN Global at a cost of £100m, the group of hostels aim to provide "a fresh, vibrant and sociable alternative" to budget hotels.
Each hostel will have an individual personality and be located in a converted, redundant building, with a playful design being a common theme through the portfolio.
Hoax Liverpool, which will have 282 beds, is being developed in the former Kansas Buildings tea warehouse which was later used as Wade Smith department store. The 23,000sq ft vacant building was bought by Starboard and Union Hanover Securities from Quintain last year.
Paul Callingham, managing director of Starboard Hotels, said: "BridgePoint Ventures as a major international real estate investment group, with a focus on investing in market-leading hospitality projects, is an ideal partner for Starboard. Partnering with them will enable us to implement award winning hotels and hostels on an international scale.
"Disused retail and office buildings often lend themselves perfectly for conversion to hotels and hostels. Our site in Liverpool is the perfect example of a prime location in a city that is a popular city break destination."
Eric Jafari, chief executive officer of BridgePoint Ventures, added: "During downturns, history has demonstrated that the demand for budget accommodation either strengthens or stays the same. We like the hostel sector because it is still in its infancy and has a lot of room for growth."
Starboard Hotels is a developer and franchisee of Intercontinental Hotels Group and Wyndham Hotel Group, and operator of the 620-bed Smart City Hostels in Edinburgh.