Ikea to develop 'budget design hotels'

Inter Ikea, the company that owns the intellectual property rights of the Swedish furniture retailer, will create a chain of sleek, inexpensive hotels across Europe.

When I first read the headline in the Financial Times (posted on August 14) on that Ikea is about to announce it will build hotels, I of course imagined floor after floor of cheerful rooms filled with Poang chairs, Lack tables, and Billy bookcases. Imagine being able to fall asleep in one of those impossibly adorable faux rooms you wander through in an Ikea store!

But as the FT reports, the forthcoming hospitality arm of Inter Ikea, the company that owns the intellectual property rights of the Swedish home-furnishings retailer, will not brand the hotels under the Ikea name. An "an established hotel operator" will instead run the 100-plus "budget design hotels," as Richard Milne, FT's Nordic correspondent, reported. The hotels are to be located across Europe.

Even if the hotels aren't labeled with the iconic Ikea name--which fans would obviously see as a draw--the concept seems wise. Lower-priced accommodations are a growing sector in the hospitality industry, as the FT pointed out; plus, given Europe's financial crises, tourists traveling within that continent are likely to respond well to inexpensive hotel rates. Given that Ikea's strength is wallet-friendly yet attractive design, Inter Ikea seems well-poised to capitalize on the streamlined yet unintimidating look and feel of Ikea furniture and retail environments by transposing these into hotels.

Intriguingly, Inter Ikea is also considering developing student housing as a future business, and the company is also working on a large-scale property development in London, among other non-retail investments. Of course, any news on how Inter Ikea is evolving and growing obviously is of interest to admirers of Ikea's style. (And there are many admirers: Inter Ikea has recently valued the Ikea brand at $14 billion.) But taking note of Inter Ikea's areas of investment beyond retail may also provide directional clues for other ambitious, design-driven corporations that are eager and financially able to pursue design possibilities beyond chairs, tables, and bookcases--and on a much grander scale.

Photo: An all-IKEA living room. (IKEA)

This post was originally published on Smartplanet.com