Reuben Brothers to build Pacha brand

Pacha Ibiza
Pacha Ibiza

The Reuben Brothers, have formed a joint venture with the Pacha Group and acquired the Hotel Pacha Ibiza, in a sale-and-leaseback transaction.

It has been reported that the brothers were planning to expand the brand around the world with a portfolio of hotels.

The 57-suite 45,000 sq ft building was located in the heart of Ibiza in front of the marina, close to Talamanca Bay.  The hotel featured a restaurant, bar, and event space whilst plans were underway to upgrade the property. The transaction represented the Reuben Brothers’ third investment in Ibiza and added to the 7.3km of coastline they already owned in Cala Conta, Cala Bassa, & Es Calo on Ibiza’s south west coast.

As the deal was announced in Ibiza, the local press was reporting that Pacha Group was planning to expand onto the nearby island of Formentera, with a restaurant, club and apartments.

In 2017 a stake in Pacha Group was sold to a group of investors led by venture capital firm Trilantic Capital Partners for a reported €350m. The deal included the Ibiza venues Pacha, Destino and Lío and the franchise including clubs in Barcelona, Sydney and Munich. It also managed Pacha Sitges, the original nightclub opened by Ricardo Urgell in 1967.

Trilantic said that it would provide additional resources to finance the company's expansion plan.

Philip Camble, director, Whitebridge Hospitality, told us: “Who know that the septuagenarian brothers were so ‘cool’? Either they are going through a mid-life crisis, or, as is more likely, there is something investment worthy within Pacha. Hopefully, this means Pacha will expand beyond its Ibiza stronghold and give other resort operators a run for their operating agreements.”

The collaboration between hotels and nightclubs was most-recently embraced at Accor, where the group acquired a 50% stake in SBE Entertainment group, which included the Mondrian brand and a series of nightclubs in Los Angeles, in 2018.

SBE continues to be led by founder & CEO Sam Nazarian from its New York headquarters. Nazarian said: “Building on our acquisition of Morgans Hotel Group in 2016, this investment will further accelerate our growth both domestically in the US and in new markets internationally, particularly in Europe.

“SBE and AccorHotels together are committed to bringing our unique lifestyle experiential offering to more destinations and serving our discerning guests with unforgettable memories.”

Sébastien Bazin, chairman & CEO, Accor, said: “I am delighted to announce this strategic partnership with one of the most innovative groups in the luxury lifestyle space worldwide. It marks a new step in expanding AccorHotels’ footprint in this fast growing segment in key US cities such as Miami, Los Angeles or Las Vegas, and in other international destinations.

“‘The new luxury’ is all about exclusive experiences and incredible lifestyle concepts and SBE brands have the perfect know-how that will complete perfectly the AccorHotels portfolio. We remain committed to providing all our guests with unparalleled service and always renewed experiences around the world.”

Last year saw the pair launch The House of Originals collection flag, which it described as “the perfect combination of SBE’s know-how in entertainment and F&B, [which] will benefit from Accor’s global platform, particularly in terms of distribution, loyalty and network development”.

In relaunching its loyalty programme, Accor said that ALL (Accor Live Limitless) would allow customers to book “a wealth of unique, iconic attractions” including hotels spanning over 30 brands, coworking spaces and an “unparalleled collection of bars, restaurants, nightclubs and other unforgettable experiences”.

Insight: While the thought of a hotel which is inspired by a group of nightclubs may cause many of us to seek an alternative venue, or country, it’s not all about passing out in some dingy corner and waking up wth a cigarette butt stuck to the side of your face. We’re old now - as Camble deftly alludes too - all of us. Pacha was founded in 1967. This is no flash in the pan and the Reuben Brothers clearly believe that if it had made it this far, then maybe it’s worth a punt.

And of those of us who can recall emerging, blinking into the dawn light after a late evening, how much would we have given for a nearby crisp white bed, instead of a lengthy wrestle with public transport clutching a scalding paper cup of Nescafé? All our worldly wealth, doubled and then some, that’s how much.

And now? The world of ‘heritage gigs’ - where bands you could barely motivate yourself to spend a fiver on in the 90s come back for another go-around - is big business as many a venue owner has noted that those DM-wearing students are now grown ups with careers who maybe don’t get out as much as they used to so can be tapped up for more cash when they do.

As the Accor/SME deal showed, for the hotel sector, it’s more of the experience-driven fun we’re coming to expect. Staying at a Pacha hotel comes with more spice than staying at just some hotel in Ibiza. After years of employing the cookie cutter, hotels need to be something more. Something with sprinkles on top of the disco biscuit.