It may not be an outright acquisition, but Accor's partnership with Faena further builds on the Paris-based hotel giant's plan to be a leader in the trendy, lifestyle hotel sector coming out of the pandemic.
Accor’s latest hotel expansion further cements its status as the cool, hip sibling among its global competitors.
The Paris-based hotel giant Tuesday announced plans to partner with Faena, a hospitality company with three hotels between Miami and Buenos Aires. The deal may seem small, but Faena’s properties are more like mini neighborhoods with restaurants, condos, and cultural components encompassing several city blocks.
The joint announcement for the partnership even labels future endeavors as “Faena Districts” rather than hotels, similar to Faena’s existing properties in Florida and Argentina.
A close working relationship — which is not a sale to Accor, Faena founder Alan Faena emphasized in an interview with Skift — between the two companies is the latest Accor play to focus even further on luxurious lifestyle hotels, which generate a higher share of revenue from their restaurants and bars.
“They bring a lot to the table,” Faena said. “It’s very difficult today to be absolutely independent, and you need to look for your perfect partner to take forward the vision we have with Faena.”
After what the hotel founder described as a two-year negotiation process, the Faena-Accor working relationship is official. Accor will assist in Faena’s global expansion plans, where a Dubai project is next in line but anything beyond that remains unclear.
Each project aims to be “one-of-a-kind, socially responsible, holistic environments, anchored in cultural experiences,” according to the partnership announcement. This will encompass hotels, residential projects, and cultural spaces.
The original Faena District in Buenos Aires includes the Faena Hotel as well as the Faena Art Center and several residential buildings in what was a neglected stretch of the Puerto Madero neighborhood in the Argentine city.
Miami’s Faena District — formerly a relatively ignored plot of land between the South and North Beach neighborhoods — includes both the Casa Faena and Faena Miami Beach hotels as well as developments like the Faena Forum exhibition space, luxury condos, and retail.
“We always find places that are not the coolest place,” Faena said. “We create the place.”
Hotels that are destinations in and of themselves are increasingly a priority for Accor. The company created independent divisions for its ultra-luxury brands, which include Raffles, as well as its lifestyle hotels, which are hotels that make as much as half their revenue off their food and beverage outlets, as part of a corporate restructuring last year.
“There are a lot of outside partners knocking on Accor’s doors trying to partner with their own similar brands,” Accor CEO Sebastien Bazin said of the new lifestyle division at Skift Global Forum last year. “But they would only do so if they’re welcomed into a dedicated business unit rather than under the large Accor umbrella.”
The lifestyle brands were later spun out into their own entity as part of a merger with Ennismore, the London-based company behind brands like The Hoxton.
It isn’t yet determined if the Faena brands would fall under the Ennismore purview, as Faena himself sees the company fitting in both the luxury and lifestyle molds. He also notes his deal is more about partnership rather than Accor taking any ownership stake.
“We didn’t sell anything. I’m much more involved than ever,” Faena said. “That’s a big difference because we keep that integrity, and nobody more than me would want to keep the brand, the energy, and the culture because this is our culture.”
But Faena does recognize a global partner like Accor can help provide a lift in growing an independent brand like his own, which he founded with British investor Len Blavatnik in 2000.
What were once independent brands like W often get criticism for selling to a bigger, global company that turns around and scales the band up and loses some of the exclusivity in the process. But distribution often outweighs coolness factor in deals like these.
Brand awareness and distribution on a global platform will be particularly beneficial when all hotel companies are trying to appeal to what limited travel is out there during the pandemic recovery.
While distribution is an added benefit to the partnership with Accor, Faena says he was ultimately drawn to the company for its willingness to think more like a smaller, boutique brand rather than a massive hotel conglomerate.
“What I found is they are big, but they are also small,” he said. “When you are a creator and you want to continue expanding and get to more people, it is always a challenge. That’s why my plan is to go to the most sophisticated team I can have.”
Photo credit: Accor is partnering with Miami-based Faena on expanding the three-hotel company beyond Florida and South America (pictured: Pao, a restaurant at Faena Miami Beach). Faena