Accor and Ennismore to create new lifestyle powerhouse
French hospitality group Accor and British counterpart Ennismore have unveiled plans to form a groundbreaking joint venture bringing together a dozen high-profile brands, including The Hoxton, Delano, Mondrian, Mama Shelter and 25hours.
Accor and Ennismore have entered into exclusive negotiations to establish ‘the world’s leading lifestyle operator in the hospitality sector’.
Bringing together acclaimed lifestyle brands
By embarking on an all-share merger, the ‘new autonomous and fully asset-light entity’ would bring together an extraordinary portfolio of brands under the same roof, including The Hoxton, Gleneagles, Delano, SLS, Mondrian, SO/, Hyde, Mama Shelter, 25hours, 21c Museum Hotels, Tribe, Jo&Joe and Working From_. The new company would be called Ennismore and operate from headquarters in London.
Under the proposals, Sharan Pasricha, founder and CEO of Ennismore, and Gaurav Bhushan, CEO of the Accor Lifestyle division, would become co-CEOs of the business; they would be supported by an experienced management team drawn from various brands and industries around the world. Accor would be the majority shareholder of the company, but Pasricha would also hold a substantial minority position.
An exceptional hospitality portfolio
At launch, the entity would boast 12 brands and have 73 hotels in operation, alongside a committed pipeline of more than 110 hotels – as well as a further 70 hotels under active discussions. It would also have 150 restaurants and bars.
Based on the current network and platform, Accor and Ennismore predict that the new company would achieve earnings before interest, taxes, depreciation and amortisation of more than €100 million ‘by midterm’, with the project also delivering cost synergies of approximately €15 million annually.
In order to create the joint venture, Accor plans to buy out its partners in SBE (taking full ownership of SBE’s ‘hotel asset-light business including the Delano, Mondrian, SLS and Hyde hotel brands, along with most of SBE’s food and beverage brands including Cleo, Fili’a or Carna by Dario Cecchini’), Mama Shelter and 25hours. A new company would also be formed to hold all the leased assets under the entity’s brands.
Retaining each brand’s unique identity
Led by Pasricha and Bhushan, the new joint venture would aim to ensure that ‘each brand will retain their unique culture and purpose, supported by dedicated teams and with the full support of their founders’, including the Trigano family, founders of Mama Shelter; Christoph Hoffman, founder of 25hours; Sam Nazarian, founder of SBE; Laura Lee Brown and Steve Wilson for 21C, and Melissa and Mark Peters for Tribe.
To help achieve its goals, the proposed new venture will be able to call on an in-house global creative studio designing interiors and brand communications; a digital and technology team working to enhance the guest experience; and a group of restaurant and bar specialists developing unique neighbourhood-specific concepts.
Accor reported that its Lifestyle operations currently account for approximately 5% of overall fees and more than 25% of pipeline fees. It added that this growth would be accelerated, building on a strong presence in Europe and the US, as well as a rapidly expanding footprint in the APAC, Middle East and South America regions.
Accor’s leaders welcome deal
Bhushan said: “Joining forces with Sharan and Ennismore’s talented teams will be a major step in Accor’s development strategy. With this combination, we are putting together an unrivalled portfolio of unique brands that appeals to owners, partners and guests, supported by the greatest set of talents in the industry, state-of-the-art distribution and tools and a common ambition to continue to grow and innovate. I very much look forward to our journey together.”
Sébastien Bazin, chairman and CEO of Accor, added: “Lifestyle, entertainment, places with a soul have been at the heart of our development and growth strategy over the last years. Partnering with Ennismore’s founder Sharan and his great teams will take our lifestyle ambition to a new and exciting level.
“With this combination, we are leading the hospitality industry by creating the largest and fastest growing ecosystem of world-class brands. Lifestyle is a sector fuelled by passionate and daring entrepreneurs, constantly pushing the boundaries of a reinvented vision of travelling the world.
“I am proud Accor has been able to join forces with many of the most creative and talented ones. This new powerful combination is set to become the engine of our exciting future growth.”
Ennismore’s founder eyes exciting new chapter
The announcement has also been hailed by Pasricha, who founded Ennismore in London in 2011.
He said: “Over the last nine years, our mission with Ennismore has always been creating hospitality brands that inspire discovery. I’m passionate about how brands make you feel, from the personalised digital experience to the design, and with an incredible team of operators and creatives around me, we have expanded The Hoxton across the globe; reimagined Gleneagles; and crafted unique restaurant and bar concepts.
“This exciting autonomous entity with Accor – one with culture and brand purpose at its heart – allows us to come together to build on our combined portfolio of unique lifestyle brands, accelerate our growth and explore new markets. I look forward to working with Gaurav and Sébastien on this exciting next chapter as we become an unrivalled player in the hospitality industry.”
Subject to employee consultations and standard regulatory authorisations, closing of the proposed deal is expected to take place in the first semester of 2021.