Even though AccorHotels recently revealed it took a $288 million hit on its 2016 acquisitions of luxury homesharing platform Onefinestay and concierge provider John Paul, it hasn’t deterred the company’s shopping spree.

The Paris-based hospitality company on Tuesday announced it intends to spend $51 million to acquire an 85 percent stake in 21c Museum Hotels, a relatively small luxury hotel chain in the United States. It has eight hotels, and three more under development. The deal does not include any real estate.

Under terms of the agreement, the co-founders of 21c Museum Hotels, Laura Lee Brown and Steve Wilson, will retain a 15 percent stake in the company and will continue to work closely both with AccorHotels and 21c Museum Hotels CEO Craig Greenberg. The brand will also remain headquartered in Louisville. The deal is expected to close by the third quarter of 2018.

AccorHotels plans to integrate the 21c Museum Hotels brand into its existing upper upscale MGallery soft brand collection of independent hotels from around the world. The deal marks the first time AccorHotels will introduce the MGallery brand to the North American market.

The integration into MGallery is somewhat fitting since the 21c Museum Hotels brand is best known for combining the experience of a contemporary art gallery or museum and bringing it into a hotel setting, often in destinations not necessarily known for their art scenes. The “21c” in the brand’s name refers to art from the 21st century.

The 21c brand launched in 2006 in Louisville, Kentucky, and the first 21c Museum hotel comprised renovated 19th century warehouses in downtown Louisville. The brand has since expanded to cities that include Cincinnati; Durham, North Carolina; Nashville; and Oklahoma City, and soon, Miami and Chicago.

The deal with AccorHotels will give 21c Museum Hotels access to Accor’s global distribution channels and loyalty program, as well as the company’s sales, marketing, and development resources.

“We are confident that the unique spirit of 21c will not only be preserved, but will flourish within the MGallery collection of boutique hotels,” 21c co-founder Wilson said in a statement. “21c will continue to bring the work of today’s most dynamic and engaging contemporary artists to the public, and this partnership will be a tremendous boost for 21c’s continued development in North America and abroad. We are extremely excited to see what the future holds.”

Building Up AccorHotels’ Luxury and Lifestyle Presence in North America

The 21c Museum Hotels investment is just one of many brand acquisitions and investments AccorHotels has made in the past two years.

Most recently, the company announced it would acquire a 50 percent stake in SBE Entertainment Group for $319 million. And in 2016, AccorHotels closed its acquisition of the Fairmont, Raffles, and Swissotel brands for $2.7 billion.

In June, AccorHotels chief development officer and head of mergers and acquisitions, Gaurav Bhushan told Skift the company was “putting a lot of energy and resources into development [in North America],” particularly on luxury and lifestyle brands.

“Together, we have a tremendous opportunity to grow the 21c brand, as well as introduce MGallery into the North American market, building both brand equities and further expanding the full range of unparalleled experiences for our guests,” Kevin Frid, AccorHotels chief operating officer for North & Central America, said in a statement. “This strategic acquisition marks a new step in AccorHotels’ strategy of being the leading player in the luxury and lifestyle segment in North America.”

For AccorHotels, expanding its MGallery soft brand in the North American market is particularly of interest, as it will allow the company to pursue more independent hotels in the region. But was it necessary for the company to spend $51 million to do so?

“The hotels certainly look like good additions to the portfolio, and I would be supportive if they had simply joined the network but I struggle to see why they need to pay $51 million to sign them up,” Richard Clarke, senior analyst, European hotels and leisure for Bernstein Research, told Skift.

Clarke noted that AccorHotels’ competitor, InterContinental Hotels Group (IHG), for instance, recently launched a new hotel conversion brand, Voco, in Europe that is entirely financed by a third party. He suspects that “Accor, as an asset light player, doesn’t seem to have the same backing of third-party finance as its U.S. counterparts and needs to support its growth with its own capital.”

AccorHotels’ Frid told Skift that AccorHotels chose to buy 21 c because, “We want to be able to control our destiny.” He also noted that 21 c’s shareholders were looking for an exit strategy and that, in order to grow the brand, the company would have needed to make significant investments into its reservations and distribution structure. “It made sense for both parties,” Frid added.

21 c Museum Hotels CEO Greenberg also noted that for 21 c, this deal is “an opportunity — not a necessity.” He continued, “It’s an opportunity for 21 c to continue to grow in North America and beyond and, hopefully, at a more rapid pace while still retaining our unique identity, and it will also improve the financial performance and growth for each of our properties. Accor is committed to growing the brand with our existing DNA.”

Both Frid and Greenberg also said AccorHotels sees opportunity to grow the 21 c brand not only in North America but in Europe as well. “We think this is a brand that, in particular in Europe, where you have many independent hotels and where art is synonymous with many European cities, there are many opportunities in Europe to grow the 21 c brand and beyond,” Frid said.

Can AccorHotels Afford to Continue Buying Brands?

Following the completed spinoff of its real estate unit, AccorInvest, in May, AccorHotels amassed approximately $5.4 billion (€4.6 billion), $319 million of which will be spent on its SBE investment. Coupled with the 21c acquisition, that means the company has approximately $5.03 billion left to spend.

AccorHotels CEO Sebastien Bazin hasn’t been shy about expressing his love of having as many as 40 brands — today, the company has a total of 28 brands, including SBE and 21c.

At the Skift Forum Europe in April, Bazin laid out his strategy for global growth, noting that in regions where AccorHotels still has room to grow, such as North America, he would look to buy, invest in, or partner with regional brands. He also said he thinks there’s no such thing as a hotel company with too many brands.

“A portfolio of brands is the exact same thing as a group of friends,” Bazin explained. “Each of you has 20, 30, 50 friends. There are friends you like to work with. There are those you want to have a solid drink with. There are those you like to go out dancing with. Or go to the museum with. Brands are the same. They have a DNA. You go to a brand for a different purpose.”

Integrating a brand such as 21 c into the AccorHotels brand portfolio will likely be a smoother process than that required for its forays into concierge services (John Paul) and homesharing (Onefinestay). But if AccorHotels wants all of its many acquisitions to be successful, it’ll need to ensure more synergies among all of its now 28 and counting brands.

It’s clear that 21c and SBE are just the latest of many more hospitality brand investments and acquisitions to come for AccorHotels, which only leaves us to ask: So, who’s next?

Skift Editor’s Note: This article has been updated to include comments from Bernstein Research Senior Analyst Richard Clarke, AccorHotels Chief Operating Officer for North and Central America Kevin Frid, and 21 c Museum Hotels CEO Craig Greenberg.

Photo Credit: The 21c Museum Hotel in Durham, N.C., has an entire gallery space within the hotel. French hospitality company, AccorHotels, today announced it is acquiring an 85-percent stake in the 21c Museum Hotels brand. 21c Museum Hotels via Associated Press