European Hotelier Betting Big On U.S. Lifestyle Hotels Despite Pandemic
Hotel giant Accor SA has inked a deal to merge its properties with that of London-based hotel operator Ennismore to form a new venture that will include 73 hospitality properties, specifically lifestyle brands.
The new entity, to be called Ennismore and headquartered in London, will include 12 brands, including 21c, Mama Shelter and SLS, all three of which have properties in the United States. About 150 restaurants and bars associated with the properties are also part of the deal.
Besides the existing properties, the new Ennismore has 110 hotels in its development pipeline and 70 more in the planning stages. Accor will own two-thirds of Ennismore, while Ennismore CEO Sharan Pasricha will own a third of it.
“Lifestyle is the fastest-growing hotel segment on the planet,” Accor Chairman and CEO Sébastien Bazin told The Wall Street Journal. “Guests want it, and hotel owners want it.”
Separately, Paris-based Accor has acquired full ownership of SBE's hotel brands and management platform from founder Sam Nazarian, who will focus on growing C3, a ghost kitchen and mobile delivery platform. In 2018, Accor bought a 50% stake in SBE for $319M. SBE’s hotel brands include the Delano, Mondrian, SLS and Hyde, and its food and beverage brands include Cleo, Fili’a or Carna by Dario Cecchini.
The company currently operates 22 hotels, with more than 40 additional properties in the pipeline. It has more than doubled in size since Accor’s initial investment in SBE. Upcoming openings by SBE include the Mondrian London and SLS Dubai in 2021.
Accor's further expansion in the hospitality sector happens as the hospitality industry continues to struggle. Full recovery in U.S. hotel demand and room revenue will be unlikely until 2023 and 2024, respectively, STR predicted in August. As for European hotels, STR reported that a second lockdown on the continent inspired performance decreases in October compared with September. Compared with October 2019, European hotel occupancies are down 57.8%, and revenue per available room is down 69%.
“Economic recovery is ongoing, but fragile, and COVID-19 is expected to continue to define the travel environment through the first quarter of 2021,” Tourism Economics President Adam Sacks said in a statement. “This sets a pace of tempered, cautious recovery in travel activity in the near term, with much stronger growth anticipated in the second half of next year.”