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Accor and Ennismore’s combined lifestyle division isn’t meant to flood the world with trendy hotels.

But it will show there is a way to expand the lifestyle hotel sector without losing the components that make these venues so appealing to travelers, say the two men who will lead the new entity.

Ennismore, owner of the Hoxton hotel brand, and Accor, owner of lifestyle brands like Delano and SLS, announced Tuesday plans to combine their lifestyle brands into a combined entity that will retain the Ennismore name. Critics chided lifestyle brands like Kimpton and Thompson hotels in the past for losing some of their appeal after linking up with global brands like Hilton and Hyatt.

Ennismore, however, sees a way to expand with Accor while retaining style.

“Of course, there’s a natural tension between creativity and authenticity and scale,” Ennismore founder and CEO Sharan Pasricha told Skift. “We acknowledge that and understand that, but that’s what makes us good partners because that tension is going to be essential and the crux of this joint venture.”

Accor showed signs in recent months of just how important lifestyle hotels are to future growth. While lifestyle hotels comprise about 5 percent of Accor’s collected fees currently, the combined Ennismore makes up 30 percent of the development pipeline fees.

The Paris-based company announced plans in September to create an independent lifestyle division, something Accor CEO Sebastien Bazin later explained at Skift Global Forum as vital in working with certain lifestyle operators.

The Delano South Beach in Miami (Credit: Ennismore)

Ennismore appears to be one of those operators expecting independence and autonomy.

“Both Gaurav [Bhushan, CEO of Accor’s lifestyle division] and Sebastien noted that, to truly create a lifestyle company that cuts boundaries, cuts brands, and was one of the fastest-growing platforms, they realized they had to be autonomous — autonomous in terms of management [and] autonomous in terms of culture. That was one of those “aha!” moments,” Pasricha said. “For me, we’ve always thrived being fiercely independent, fiercely autonomous — independent in terms of culture, creativity, and authenticity.”

Ennismore CEO Sharan Pasricha (Credit: Ennismore)

Talks regarding a combined lifestyle entity began during the pandemic while Pasricha and Bhushan were both locked down in London. But the talks didn’t begin out of financial necessity, both leaders said during an interview with Skift.

As Bazin noted in the past, it became clear a successful lifestyle entity would require more than just a typical joint venture and leaving key responsibilities at Accor headquarters.

“Both Sebastien and I have been engaged in active conversation with Sharan for several weeks,” Bhushan said. “I would say before we engaged in a serious conversation with Sheran, we were of the view if we are going to do this seriously, it needs a different skillset, a different team of people, and different mindset to be able to deliver a proper experience in a lifestyle hotel.”

The need for different skills stems from how lifestyle hotels operate so much differently than Accor’s other hotels. As much as 45 percent of revenue at a lifestyle hotel comes from food and beverage, Bhushan added.

The new Ennismore entity, which Pasricha and Bhushan will lead jointly, will be headquartered in London. Accor will own two-thirds of the venture while Pasricha retains the remaining third.

“It’s a standalone entity, and we have Sharan coming onboard as a co-CEO with myself. To me, there is no greater commitment to having a true partner onboard than that,” Bhushan said. “What we need is the finesse, understanding of product, programming, marketing, [and] brands that Sharan and his team has. To us, it was the perfect marriage to put the scale, speed, and distribution capacity of Accor together with the management expertise that Sharan brings.”

Smart Growth

The combination stands to create the world’s largest lifestyle hospitality company, Accor claimed in its initial announcement. But Ennismore’s leaders also recognize bigger doesn’t translate to better in a sector known for hip, unique hotels with distinct brand identities.

Gaurav Bhushan, CEO of Accor’s lifestyle operations and Ennismore co-CEO (Credit: Ennismore)

“What we’re not trying to do is take one brand and have hundreds and hundreds of hotels come out of that,” Bhushan said. “You put the brand in the right location and make sure it is what it stands for, but you’re not trying to jam a square peg in a round hole and take Hoxton to 200 or 300 destinations.”

The new Ennismore entity will comprise 73 hotels across 12 brands and a development pipeline of 110 hotels.

An additional 70 hotels are under discussion. More than 150 restaurants and bars are also part of the merger.

“The network is 250 hotels, which is substantial as a lifestyle platform but, compared to Accor’s total hotels or number of hotels it adds each year, is minimal. That’s an important distinction,” Pasricha said. “We’re never going to do thousands of hotels. That’s not the mission or the intent. We’re going to do hundreds.”

While the merger isn’t about adding thousands of hotels around the world, some brands are likely to grow faster than others. The Tribe brand already has more than 50 hotels in its development pipeline after Accor launched it in 2019. The Hoxton, SLS, and Mondrian brands are also popular around the world.

Ennismore already has four leads on potential Hoxton deals across the Middle East and Asia since announcing the new entity this week, Bhushan said. The key will be ensuring these brands maintain their pre-merger appeal.

“If I was a betting man, I’d bet on this duo and this team to make it happen because you have that innate curiosity and deep cultural authenticity that exists and the might of huge distribution,” Pasricha said. “Our role now is to make sure each of these 12 brands continues to deliver on a promise and speaks to the communities and neighborhoods they are in.”

Moving Forward

The new Ennismore collection of brands enables Accor to further expand into the U.S. as well as position itself for post-pandemic travel demand. But leaders maintain the new entity is not one fueled by the pandemic itself.

“We’re not doing this just because we think there will be a quicker recovery post-pandemic into the segment. This is not a post-pandemic gig. This is about making sure we’re building a long-term business,” Bhushan said. “Follow the customer, and the customer is after a much more elevated experience than they have been the past few years.”

Accor sees greater revenue per square foot from its lifestyle hotels due to their food and beverage options. This became even more evident following the first pandemic lockdown.

“The numbers coming out of our lifestyle hotels were significantly higher than our other hotels,” Bhushan added. “You’re driving almost half your revenue from food and beverage, which is local business, so it comes back much quicker.”

The combined entity also presents an opportunity for Accor to expand further into the U.S. and gain market share from its competitors. Rather than directly go head-to-head with a massive brand, Ennismore stands to compete by offering an entirely different experience.

“Could we be the right alternative to a lot of the brands that have proliferated in the hundreds and hundreds over a lot of U.S. cities? I absolutely think so,” Bhushan said. “I think the U.S. is going to be a huge opportunity for us because the markets are looking for something different, and our owners are looking for something different.”

Photo Credit: Accor and Ennismore's new lifestyle venture (pictured: The Hoxton, Paris) isn't about adding thousands of hotels around the world, company leaders say. Ennismore