Blackstone Bets on UK Travel Sector with Village Hotels Takeover
Skift Take
Key Points
- Blackstone acquired Village Hotels from KSL Capital Partners to expand in the UK travel sector.
- The $1 billion deal adds 33 properties and aligns with Blackstone's focus on experiential hospitality.
- The acquisition follows Blackstone's previous investments like Bourne Leisure and signals future growth in hotel sector deals.
Summary
Blackstone, a leading real estate investor, has acquired Village Hotels from KSL Capital Partners, expanding its presence in the UK travel sector. The deal, valued at around $1 billion, reflects Blackstone's confidence in experiential hospitality and leisure. Village Hotels offers a hybrid model catering to traditional stays, fitness, dining, and co-working spaces, adding 33 properties to Blackstone's portfolio. This acquisition aligns with Blackstone's previous investments in UK leisure, such as Bourne Leisure, and signals potential growth in hotel sector deal-making if economic conditions stabilize.
Blackstone, one of the world's largest real estate investors, said Wednesday it had acquired Village Hotels from KSL Capital Partners, a private equity firm specializing in travel and leisure. The deal expands Blackstone's footprint in the British travel sector amid an apparently growing consumer demand for experiences over goods.
The companies didn't disclose the price or deal terms, but it is valued at around $1 billion, according to a source who spoke to PE Hub.
Why It Matters
This move signals Blackstone's continued bullishness on experiential hospitality and leisure, particularly in the UK market.
The deal adds 33 properties in large regional cities and suburban areas across the UK to Blackstone's portfolio.
Village Hotels, known for updating the full-service hotel concept to the hybrid work era, offers traditional hotel stays alongside fitness clubs, dining outlets, and co-working spaces.
Between the Lines
Blackstone is doubling down on its UK leisure investments, following its 2021 acquisition of Bourne Leisure.
The transaction marks an exit for KSL Capital Partners, which bought Village Hotels in 2014, and helped it add more than 1,200 guest rooms and 45,000 fitness members. Village Hotels now has 4,400 guest rooms.
More Deals Coming?
Some analysts are optimistic that dealmaking in the hotel sector will pick up if the U.S. Federal Reserve begins cutting interest rates this year.
This would end uncertainty about the direction of rates and help bring confidence to dealmakers in the U.S. and Europe. Global hotel transaction volume could exceed 2023's unusually low level of deal-making by 15% to 25%, according to hotel broker JLL.
What They're Saying
James Seppala, head of real estate in Europe for Blackstone, sees "great potential in lodging and leisure."
Gary Davis, CEO of Village Hotels, said the deal will let his brand "expand the number of hotels in the UK."
Blackstone's Interest in Travel
Blackstone has made other plays in the travel sector. In the past year, it has invested in Japanese hotels. A few years ago, Blackstone and Starwood Capital Group bought Extended Stay America for about $6 billion.
Blackstone controls Motel 6 through its G6 Hospitality holding. It owns a stake in hotel tech player SiteMinder and meetings tech player Cvent. In 2021, the firm bought Bourne Leisure, owner of Haven Holiday Parks and Warner Hotels, and has since invested about $694 million in site upgrades and expansions.
Most famously, Blackstone took Hilton private and then guided it to an IPO in what may have been the most successful hotel acquisition of all time.
Photo Credit: A room at Village Hotels. Village Hotels
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