Mergers and acquisitions are not typically a family affair, even in hospitality. Bucking that trend is luxury hospitality management company Auberge Resorts Collection, which recently entered into a strategic partnership with Libra Group, owner of luxury hotel company Grace Hotels, to welcome five of Grace's European and U.S. properties under Auberge's umbrella.
Auberge Resorts Collection was established in 1998 as a privately held family company focusing on luxury hotels and resorts. The company's inaugural property was the Auberge du Soleil in Rutherford, Calif., a hotel that launched the company’s portfolio across the western and central U.S.
According to Craig Reid, president and CEO of the Auberge Resorts Collection, the company began seeking inroads with its customers from the opposite end of the country, as well as Europe, in early 2017. The search for a suitable portfolio to acquire led the company to Grace Hotels, which owned several hotels in the northeast U.S. and Europe. To Auberge, it was a perfect fit.
“It sounds transactional, but in reality it was all about having the right chemistry,” Reid said. “In this case it was two families—the Friedkin family at Auberge and Logothetis family, owners of the Libra Group—and second the portfolio had to fit and embody the qualities we value.”
It isn’t difficult to guess the qualities valued by a luxury lifestyle hotel brand in 2018, but suffice to say Auberge was looking for one-of-a-kind hotels that embraced their locale, as well as an approachable form of luxury. The company began talks with Grace Hotels in mid-2018, and Reid said the discussions progressed quickly.
“Philosophically, there was an immediate alignment between us,” Reid said. “A family is a group of colleagues with common values, passions and drives. All of the opportunities that came our way were judged on the quality of those factors, our team and our strategy.”
Of the five Grace Hotels properties joining Auberge’s portfolio, two are located in Greece—one in Santorini and another in Mykonos—and the others span the northeast U.S. These are the Mayflower Inn & Spa in Washington, Conn.; the White Barn Inn & Spa in Kennebunk, Maine; and the Vanderbilt Hotel in Newport, R.I.
“Each of our hotels must speak to their locale, such as the Mayflower, which is a beautiful country home. It’s full of character, and its restaurant is in a barn,” Reid said. “All three of the U.S. hotels serve the Boston and New York markets, which is very important to us. These are great destinations that are very sought after by discerning travelers.”
Reid said the rebranding process is targeted for completion before the end of the year, and many of the hotels will retain their first name rather than a “family” name. However, some of the hotels will require a little extra work before they are ready to reopen.
“Some of the hotels in Grace’s portfolio have great bones, but they need a little more love and attention, such as the Vanderbilt, which is our biggest challenge initially,” Reid said. “It’s the property with the largest gap in terms of concept and product, but we have a great team working on it. This is not a race. We are doing this for the long term.”
Future developments within the Grace Hotels brand are already underway, and these hotels also will be under Auberge’s umbrella. Some of these locations include Athens, Kalamata, Kea and Santorini in Greece; Marrakech, Morocco; Buenos Aires, Argentina; and St. Moritz, Switzerland.
“Through this deal with Grace, we have already been introduced to three more development opportunities, and in all three instances a critically important part of the discussion was whether or not we already had positioning in a market,” Reid said.
Location and positioning are of greater importance than ever before, Reid said, because travelers are growing in experience and discernment. Offering unique experiences is becoming more challenging for hotel companies over time, particularly at the luxury level.
“The consumer of today is so privileged, and travel has become so much more accessible and affordable that consumers are looking for more meaningful experiences,” Reid said. “Five to 10 years ago, the fact that you were going to Cambodia, Vietnam or Antarctica was luxurious. Today, the more sophisticated traveler doesn’t think twice before going to these places, so they want a more textured experience, one that involves culture, folklore and community, something soulful for their hearts as well as eyes and skin.”