In October, Accor closed its joint venture with Ennismore, establishing the world’s largest lifestyle hospitality company. Ennismore comprises 14 global hotel and co-working brands and a collection of restaurants and bars, including 21C Museum Hotel, 25hours Hotels, Delano, Gleneagles, Hyde, JO&JOE, Mama Shelter, Mondrian, Morgans Originals, SLS, SO/, The Hoxton, TRIBE, and Working From_, at the time representing 87 operating properties with 141 more in the pipeline. At ALIS 2022 in Los Angeles, LODGING caught up with Mark Purcell, senior vice president, development, North & Central America, Accor, and Phil Zrihen, head of Americas, Ennismore, to discuss Accor’s overall development plans and how the company plans to leverage its alignment with Ennismore to expand its lifestyle hospitality footprint in North America.
What have been your takeaways from ALIS?
Phil Zrihen: A common theme I’ve been seeing is a lot of significant capital looking for a place to be deployed, and not just small opportunities. More so than in other years, we’re seeing an accumulation of capital looking for big opportunities, specifically with lifestyle hotels, and taking those brands beyond just gateway cities to more secondary markets.
Mark Purcell: Generally, there’s a positive outlook, like we’re finally emerging from this. It may be a month or two before we work our way through it, but generally, there’s a good outlook on both performance and transactions.
What were some key developments from the past year?
Purcell: For Accor with the Ennismore joint venture, we had a record year for signings in the region, with 11 transactions signed across a wide variety of brands. We’re excited about that momentum on the growth side. With the Ennismore transaction happening in October, the pipeline looks fantastic on the lifestyle side within this region, and we’re getting the team up and running for great things on the lifestyle side in 2022 and beyond.
At the brand level, this year, we’ve seen our first MGallery in Florida and the first in Canada, and we just announced our first MGallery Hotel & Residences in Mexico for 2024. That’s pretty tremendous growth for a collection brand that previously was not really seen in North America.
Our new luxury collection brand, the Emblems Collection, is entering the upper-upscale space with some new builds and opportunities for conversions of soft-branded hotels. That will be more specific to higher-rated and resort markets, but I definitely see that brand fitting into the North American market.
Zrihen: We’ve had this thesis that what resonates with potential owners is our ability to bring the uniqueness and the DNA of lifestyle while combining it with what a large entity like Accor and its distribution, loyalty, and sales platforms. That thesis has been proven by the interest in the brands and a growing development pipeline. We know that there have been quite a few M&A transactions in the past where that’s been attempted, and the brands have become somewhat commoditized; there’s a little bit of concern about how exactly we’ll keep the brands what they were, even though they’re part of a big organization. We have been laser-focused on making sure that those brands remain unique.
How has this joint venture been progressing since October?
Zrihen: We put six companies together: 14 hotel brands, 40 F&B brands, and a whole bunch of people from different geographies. There are a ton of moving parts. It’s been challenging, but everybody has kept their eye on the ball when it comes to striking that balance of delivering lifestyle hospitality at scale. The Americas are a very big growth market for Accor, and we are playing a pretty important role in that.
Purcell: It’s been a good collaboration: Everybody on both sides has been working hard to team up and allocate the necessary resources to reach the goal of growing Ennismore lifestyle brands.
Are there specific sectors and regions that you’re currently focusing development efforts?
Purcell: With some of the Ennismore lifestyle brands, we have the ability to go into secondary and tertiary markets and bring a unique product that doesn’t really exist there. Largely, people have viewed the lifestyle sector as being a little bit higher-end, like our SLS brand, which would be more focused on a larger urban market or resort market. There’s a great opportunity to take some of the lower-scale brands into some of those secondary and tertiary markets to be the leaders in those markets. We’re still signing in bigger markets, but now we’re painting a broader brush in multiple markets.
Zrihen: The other interesting dynamic that we started seeing when we were at sbe, which is a predecessor to Ennismore, is that because of the demographic that’s associated with lifestyle, you have a lot of corporate entities that are interested in capturing the attention of our customer base. We have an active dialogue with many corporations—airlines, bottled water brands, liquor companies, gyms, and so on—that want to partner with us to figure out how they can access that consumer. That is beneficial to us and our owners because it results in preferred pricing and
