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French hospitality giant Accor, the largest hotel operator in Europe, has agreed to merge its boutique properties with a U.K. hotel operator called Ennismore.

The deal will create the largest global operator of so-called “lifestyle hotels.”

The Story

Following the all-stock merger, the venture will feature 70-plus properties under 12 brands including Mama Shelter, SLS, Mondrian and 21c.

But What Is A Lifestyle Hotel? If you’ve ever stayed at an airport Hilton Garden Inn - think the exact opposite.

The website for Mama Shelter L.A., for instance, refers to the hotel as a “she” who “brings together paint-splattered artists, well-heeled designers, entrepreneurs and dance hall DJs.”

If that didn’t paint the picture, imagine an active ground-floor bar scene serving up $18 cocktails. Accor Chief Executive Sebastian Bazin defined a lifestyle hotel as one which derives at least 40% of its revenue from food, beverage and other entertainment services.

Deal Details: The entity will be two-thirds owned by Accor, but operated under the Ennismore name. Accor also announced yesterday it has spent €300 million to take full ownership of sbe, which owns four of the brands that will now operate under Ennismore.

Rationale

Two words: Business. Travel.

Lifestyle hotels are designed to serve as a destination in their own right, attracting a local clientele to create a lively vibe with less dependence on business travel.

Many of the largest hotel groups in the world are working to diversify operations:

  • Marriott, Accor, and Radisson have all stepped up efforts to encourage consumers to use their hotels as co-working spaces.

Bazin said, “Lifestyle is the fastest-growing hotel segment on the planet.... Guests want it, and hotel owners want it.”

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