Accor and Hoxton boutique hotel venture valued at more than €2bn ahead of deal

Accor is to sell part of its stake in a luxury hotel joint venture with the Hoxton boutique chain to a Qatari consortium, valuing the company at more than €2bn and signalling confidence in the top end of the market amid a worsening economic outlook.

Europe’s largest hotel company launched the joint venture, which operates under the name Ennismore, in October through a merger of a quarter of its brands and the Hoxton hotels. The company has doubled the number of hotels it operates since the launch to more than 130 sites and also runs 275 bars and restaurants.

As part of the deal, Accor will sell a 10.8 per cent stake in Ennismore to a group of Qatari investors for €185mn, with backing from Qatar First Bank, but will retain a majority shareholding. Sharan Pasricha, co-chief executive of Ennismore, will retain just under 30 per cent of the company.

Sébastien Bazin, Accor’s chief executive, said the deal was a testament to the “formidable success” of Ennismore, which specialises in luxury hotels that serve as a destination in their own right and can attract a local clientele to their bars and restaurants.

“The future of hospitality has to lie with servicing as much a local customer base as it is to service someone who is travelling. We have to co-mingle, it’s a must,” he said. Around half of company revenue comes from food and drink sales.

Ennismore, which operates hotels in 40 countries, plans to open around 100 extra sites as part of a rapid rollout. Last year it confirmed plans for 60 new projects.

Bazin said Ennismore had benefited from a quick recovery after the pandemic, adding that the company was also earning revenue from remote workers as part of its Working From_ co-working brand, which he said would help it weather any slowdown in consumer demand later this year.

The group is expected to achieve earnings before interest, taxes, depreciation and amortisation of more than €100mn by 2023, two years earlier than originally forecast, he added.

There are 14 hotel brands under the Ennismore umbrella, including the luxury Gleneagles estate in Scotland, former Accor prize assets the Mondrian in London’s Shoreditch and SLS hotels in North America, as well as the Hoxton chain.

The deal is expected to be completed by the close of the year subject to employee consultation and regulatory approval.