AccorHotels CEO Sebastien Bazin is working hard on his stated goal to have more brands than Marriott International as on Tuesday the Paris-based hotel company announced it has signed a deal to acquire for US$51 million an 85% share in Louisville, Kentucky-based boutique management company 21c Museum Hotels.
Founded by contemporary art collectors Laura Lee Brown and Steve Wilson in 2006, 21c has eight properties open and three under development in secondary U.S. markets like Cincinnati, Kansas City, Nashville and Louisville. Now, North America’s only collecting museum dedicated solely to art of the 21st century will take its place in Accor’s MGallery collection of boutique hotels, marking the introduction of the MGallery brand into the North American market.
Accor will support development opportunities, sales and marketing exposure and access to its distribution networks, while 21c retains its independent spirit.
Co-founders Brown and Wilson will retain a 15% stake in the company, and will remain closely involved in providing creative guidance and support. The brand will continue to be led by President and CEO Craig Greenberg and retain its Louisville headquarters.
No real estate is included in this acquisition. The transaction, which includes an additional earn out payment for the sellers, should be completed during the third quarter of 2018.
Kevin Frid, Accor’s chief operating officer for North and Central America, told HOTELS on Tuesday afternoon that in a world overloaded with brands that are difficult to differentiate, the founders of 21c do have something uniquely different with the lobby art gallery concept.
“I think the potential to grow is significant,” Frid said. “We are keeping 21c as a brand and expansion brand, and will put the MGallery soft brand on them in the New Year, introducing that brand to North America. The opportunity is as much about launching MGallery in the U.S. and growing 21c at the same time. We can do them in tandem or on separate tangents. So many owners looking for soft brand these days and this concept is so different… If owners and developers just want to do MGallery or 21c and MGallery together I think we can do 100 of them.”
Frid added that the broader play here is that Accor believes its global growth story is coming through lifestyle and luxe brands, and this fits right in. “In the U.S., Accor doesn’t think it can be dominant in economy and midscale, so our play has to be in upscale, luxe and lifestyle segments,” he said.
The icing on the cake, added Frid, with the exception of Chicago, Accor is not present in any 21c markets. “So it’s a great entry into all these markets, as well.”