Skift Take

The pressure is on to show a big company like Accor can run cool hotel brands without losing the attention to detail that made them cool in the first place — Ennismore founder Sharan Pasricha's continued involvement is crucial in achieving this.

Two of the largest operators of so-called lifestyle hotels closed Monday on a merger aimed at boosting the brands without losing their curb appeal and cool factor.

Accor, operator of brands like SLS and Morgans Originals, and Ennismore, the company behind brands like the Hoxton and Gleneagles, will jointly operate their lifestyle hotel brands in the new standalone entity that retains the Ennismore name.

Accor is the majority shareholder in the all-share merger with two-thirds of the company while Ennismore founder and CEO Sharan Pasricha will retain a third. Pasricha and Gaurav Bhushan will run the company as co-CEOs.

“This joint venture has been months in the making and I couldn’t be happier to join Ennismore as Co-CEO, alongside Sharan,” Bhushan, who is also Accor’s CEO of lifestyle and entertainment, said in a statement. “Our teams are ready and eager to build on each of our unique lifestyle brands, with a dynamic global pipeline, creating an ecosystem of memorable and curated experiences across all our properties.”

Plans of the merger were first announced nearly a year ago. The combined entity includes 87 properties with a 146-hotel development pipeline. The merger’s aim is to couple Ennismore’s ability to build cool brands with Accor’s knack for scale and ability to provide a global distribution platform.

While the term lifestyle hotel is a murky one as far as what it means to different players in the industry, Accor’s leadership team generally sees the sector as one that appeals more to local crowds and the surrounding neighborhood than other types of hotels.

Accor leaders have said in the past these hotels make more than half their revenue of food and beverage as well as other amenities like coworking. Working From_ is an Ennismore coworking concept borne from how popular lobbies at the Hoxton became for remote workers.

Accor CEO Sebastien Bazin at Skift Global Forum last month noted more than half the revenue of these hotels come from the surrounding local community. He also sees plenty of potential for this sector within the greater Accor ecosystem: Lifestyle hotels may only account for about 5 percent of Accor’s revenue today, but the sector is roughly a quarter of the company’s hotel development pipeline by value.

But another motive for the merger stems from the fact leaders at both companies think a special kind of management and ownership structure is needed when these types of hotel companies expand. There are plenty of critics out there who scoff at brands like Kimpton and Thompson for losing their cool factor after IHG Hotels & Resorts and Hyatt, respectively, took over.

“Of course, there’s a natural tension between creativity and authenticity and scale,” Pasricha told Skift in an interview last November. “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.”

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Tags: accor, ennismore, mergers and acquisitions

Photo Credit: Paris-based Accor is now a two-thirds shareholder in the new Ennismore lifestyle entity of hotels, restaurants, and a coworking provider. Ennismore

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