Main Photo: The Freehand, New York
Date: July 2019
Location: New York, Chicago, Los Angeles and Miami
No. of Keys: TBA
Seller: Sydell Group owned Freehand Hotels in conjunction with American billionaire Ron Burkle’s private equity firm The Yucaipa Companies.
Buyer: Queensgate Investment Co., which owns the Generator brand. Generator operates a variety of hotels and hostels across Europe and recently opened two U.S. properties in Miami and Washington, D.C.
Queensgate CEO Jason Kow said the acquisition means Generator will become one of the largest lifestyle hospitality platforms in the world.
Hostels and micro-hotels have been sexy again for the last few years. Sydell Group and Ron Burkle are cashing in as Generator works to move away from its hostel roots and into the wider world of boutique hospitality.
As alternatives to mainstream hotels grow in popularity among travellers, brands offering different concepts have found success and acquisition interest from industry players.
The acquisition is logical for Generator; it adds four trendy properties to its U.S. portfolio after recently launching its presence in the country while further moving away from its branding as a boutique hostel operator.
Generator CEO Alastair Thomann told Skift last year that the company intended to pivot away from its roots as a hostel company to a more diverse range of affordable lodging options.
“Our industry, in general, what we used to call the hostel industry, in terms of the luxury hostel, is moving more and more toward boutique hotels,” Thomann said. “And you’re finding boutique hotels adding dorm rooms; they’re moving toward the hostel model. It’s more about the social spaces and the community. At some stage, we’re going to be very close together, these two segments.”
For Sydell Group, perhaps this represents an opportunity to focus on developing bigger projects after relaunching the Monte Carlo as Park MGM last year and opening a NoMad-branded hotel on the Las Vegas Strip as well.
“With design, we really want to lead,” Sydell Group CEO Alex Zobler told Skift last year. “With technology, we probably almost always want to be one small step behind. Because I find that very often with technology, when they first create it, it doesn’t work well. So we watch carefully what other people are doing, but we don’t necessarily want to be the first ones to try everything out.”
The price Generator paid for four hotels seems high, but makes sense as a strategic move to quickly extend its reach in the U.S. and counter growth by other European competitors.
Price per Key: TBA
THPT Comment: Interesting move for both parties, Queensgate and Sydell. The hotel/hostel space is getting blurred…hostels are taking on hotels full on.
First Seen: Skift
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