Skift Take

Mondrian's London return may only entail one hotel, but it represents the beginning of a massive development pipeline for Accor's lifestyle hotel division in partnership with SBE.

A Mondrian flag will once again fly over a London hotel roughly two years after the brand left the UK.

Accor and SBE plan to open the Mondrian Shoreditch London in spring 2021, the hotel partners announced Monday morning. The hotel will be the sixth Mondrian and comes after Accor announced plans last month for an independent division for lifestyle hotels. Accor leaders see this sector as a potential for major growth in coming years.

“Lifestyle brands and hotels like the Mondrian in Shoreditch are going to be great examples of how to leverage the market,” said Gaurav Bhushan, CEO of Accor’s lifestyle division. “These brands thrive on authenticity and a certain level of service.”

Accor’s newest 120-room Mondrian — formerly branded as The Curtain — will include a rooftop lounge called the Rumpus Room, a restaurant by chef Dani Garcia, and continued operations of The Curtain Members Club.

Innovative food and beverage programs are key to not only maintaining a Mondrian brand distinction, Bhushan said. They are also crucial in accelerating hotel recovery timelines from the pandemic.

Stronger food and beverage outlets tend to bring in local clientele and put less reliance on international travelers at a time when many borders remain closed, the thinking goes.

“You’re able to leverage revenue growth much quicker than a regular hotel because a significant portion of revenue comes from food and beverage,” Bhushan added.

Going Global

A previous Mondrian London, which operated in the city’s South Bank district, rebranded in early 2019 under new ownership. But the hotel partners remain bullish in taking the brand global, a plan underway since Accor bought half of SBE in 2018 for $319 million.

“Accor has been a great partner to us since the investment in SBE. They’ve shown a commitment to lifestyle as a whole and have been incredibly adaptive to our business,” said Chadi Farhat, chief operating officer at SBE. “They see future opportunities in the segment as we do.”

Mondrian was initially a U.S.-focused hotel collection, with properties in Los Angeles and Miami. It eventually expanded to New York City and Doha in 2017.

The Mondrian Seoul Itaewon opened in August, and 10 new Mondrian hotels are slated to open by 2022. Bhushan estimates the brand could expand in the next few years to as many as 50 hotels.

The Mondrian Seoul Itaewon.

“Mondrian has been a great performer ever since our investment in SBE. This has been one of the stars,” he added. “We’ve had great traction in developing the brand.”

Accor plans similar international growth for SBE’s Delano brand, which is expected to open a resort on the Italian island of Sardinia in 2023. But Delano will remain the more exclusive of the two brands.

“Delano is positioned very much as the luxury hotel. You don’t really grow high-end luxury brands at the same pace,” Bhushan said. “Delano will definitely be strong, but it will be more select.”

Lifestyle Hotels in the Revenue Driver’s Seat

Accor CEO Sebastien Bazin noted the lifestyle and ultra-luxury sectors as “high-potential segments” in a September memo to employees.

Having an independent division for these two sectors was key in allowing further partnerships like it has with its investments in SBE and other brands like 25hours Hotels, Bazin said in a later appearance at Skift Global Forum.

“There are a lot of outside partners knocking on Accor’s doors trying to partner with their own similar brands,” he added. “But they would only do so if they’re welcomed into a dedicated business unit rather than under the large Accor umbrella.”

Lifestyle hotels may be a smaller business segment for the hotel industry at the moment, but it is becoming an increasingly crowded field. IHG is moving ahead with expanding its Voco brand of hotels, and Hyatt is expanding its Thompson Hotels brand.

As much as a quarter of Accor’s entire development pipeline could be devoted to lifestyle hotels in coming years, Bhushan said. The company’s current total pipeline is roughly 208,000 hotel rooms, according to an investor presentation last week.

While he recognizes there are competitors and a current low-demand environment for hotels due to the pandemic, Bhushan also sees the current ramp-up strategy as vital to winning over new customers.

“This is not a short-term business,” he said. “We obviously expect the market to come back and come back strong. We want to be ready with a new product to position ourselves to absolutely leverage the market as soon as we start to see the turnaround.”

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Tags: accor, coronavirus, coronavirus recovery, sbe

Photo credit: Accor and SBE are bringing the Mondrian brand back to London as part of a 10-hotel expansion for the brand through 2022. Mondrian Shoreditch London

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