Accor has been incrementally expanding its lifestyle hotels portfolio during the previous decade but doubled down on the sector in the middle of the pandemic. In late 2020, the company behind brands such as SLS and Delano announced a deal with Ennismore, parent operation to Hoxton and Gleneagles, among others, to jointly operate their lifestyle segments under a new standalone entity that will retain the Ennismore moniker. Accor is the majority shareholder in the newly formed company, and Accor’s Gaurav Bhushan and Ennismore founder Sharan Pasricha will serve as co-CEOs. Just as the deal was being finalized, acting hotels editor Tovin Lapan spoke with Bhushan about the lifestyle sector’s potential.
Q: How has the lifestyle hotel sector changed in the past decade?
A: When we opened our first lifestyle hotel [in 2011], SO/Bangkok, it was an experiment, and we were in the market to do something really different … but after SO/Bangkok there was a bit of a gap, and momentum for lifestyle hotels really picked up in the last few years. What triggered it for us was Mama Shelter, a brand out of France. Accor acquired a stake in Mama Shelter in 2014, and by that time the lifestyle sector had really started to pick up, and you could clearly see momentum.
Customers were increasingly looking for something quite different, and not a lot of hotel groups were looking closely enough at how the customer was evolving. Most of us didn’t have the brand portfolio to cater to the evolving customers looking for a different experience. They were not looking for cookie-cutter properties, they wanted better restaurants, bars and design.
Six years ago, lifestyle hotels were almost at zero, we had three to four. By the end of the year, we will have 100 lifestyle properties under operation, and we plan to introduce 15 to 16 properties each year moving forward. Now, the lifestyle sector accounts for a quarter of Accor’s total global pipeline. It’s gone from virtually nothing to a significant part of Accor’s future.
Q: Roughly a year after it was first announced, the deal between Accor and Ennismore has finally been completed. What’s first on the agenda?
A: We’ve been able to do some planning, but we haven’t been able to execute. Now, it’s all systems go and we can get the team together. We are working on one integrated platform for all parts of the world and putting all those different groups together with a common vision for growth and opportunity. It’s a fast-growing business, and what I’m most excited about is working on building that business over the next few years.
Q: Despite the pandemic, Accor has remained quite active on the expansion and innovation front. Can you talk about why it was important to continue pushing forward, even amid the crisis?
A: The answer is very simple: You have to look to the future, and you can’t sit still. Of course, we want to be cautious. We are a public company and have a responsibility to shareholders. Part of that responsibility is to protect the business, and we have been quite successful over the last 18 months. But we can’t stop there, and the Ennismore deal is a great example of positioning the company well moving forward and maneuvering responsibly with innovation. It was a cashless merger. Accor didn’t put out any money, and the hope is that, with what both sides bring to the table, one plus one will equal three. That’s what we’re betting on.
Q: Where are you looking to establish or further expand your lifestyle footprint?
A: We see significant opportunity in the secondary and tertiary cities in the United States. Post-Covid we are watching quite carefully and feel there is enormous opportunity to enter new markets and serve as local community hubs — to be the coolest hotel in town. People are looking for something different. There has been a demographic shift from coastal cities to new, growing cities like Boise or Minneapolis or Austin. There is a huge demand for lifestyle products, and we are perfectly positioned for that demographic change.