In another show of support for the boutique hotel market, AccorHotels is reportedly buying a 30-percent stake in Germany's 25hours Hotels for $39 million. 25hours Hotels runs seven boutique hotels in Hamburg, Frankfurt, Berlin, Zurich and Vienna, and five more are slated to open in Zurich, Munich, Cologne, Dusseldorf and Paris in the next two years. The company also has expansion plans for Melbourne, Miami and Milan. It will continue to be run by CEO and co-founder Christoph Hoffmann.
"Through this partnership, AccorHotels is investing further in one of the fastest-growing segments in the industry and enriching its offer to achieve scale in this segment," AccorHotels Chief Executive Sebastien Bazin said in a statement.
This is not AccorHotels' first move to capture the ever-increasingly lucrative millennial demographic. Its Mama Shelter boutique brand has been around for a while, and it launched its Jo&Joe youth hostel brand in September. 25hours Hotels is expected to join the Mama Shelter umbrella.
AccorHotels has grown in recent months through mergers & acquisitions as well as strategic partnerships. Late last year, the company announced plans to acquire FRHI Hotels & Resorts and its three luxury hotel brands—Fairmont, Raffles and Swissôtel—in a cash-and-share deal reportedly worth $2.9 billion. The deal was finalized in July. At the beginning of 2016, AccorHotels finalized its alliance with China’s Huazhu Group. This partnership, announced in 2014, is set to accelerate AccorHotels’ brands in Asia with the opening of 350 to 400 GrandMercure, Novotel, Mercure, ibis and ibis Styles hotels in China, Taiwan and Mongolia over the next five years. In April, AccorHotels purchased U.K-based home rental start-up Onefinestay for an estimated $168.45 million.
AccorHotels cut back the upper end of its 2016 profit target range last month after its French and Belgian operations were hit by security fears following militant attacks in those countries.