LONDON—The hospitality sector was always fair game for Ennismore Capital. It just took a little longer to get onto the playing field than company management had expected.
But with the purchase of the award-winning The Hoxton hotel in Shoreditch, London, the principal investment firm is hoping to make up lost ground by expanding the brand throughout London, Europe and the United States.
“We’ve set about this journey about 18 months ago really with a view to look at the hospitality sector,” said Sharan Pasricha, managing partner of Ennismore and interim CEO of the newly formed Hoxton Hotels, which was created to grow the boutique brand.
The firm aimed to find a “fundamentally profitable business that could be scaled, was a segment leader, one that had a very strong fan following with customers and a (strong) management team, and one that had a very interesting brand.
“The Hoxton ticks a lot of those boxes,” Pasricha said.
The 205-room hotel has generated a lot of buzz since its founding in 2006 by Pret-a-Manger-co-founder-turned-hotelier Sinclair Beecham. It has appeared on numerous awards lists, including The Telegraph’s 50 best budget hotels in the world, CNBC’s best European business hotels and TripAdvisor’s Traveler’s Choice Awards, among others.
“Our challenge is to take this phenomenal brand and try to replicate its success,” Pasricha said.
Expanding the brand
Though The Hoxton itself exudes a no-nonsense atmosphere, Ennismore had to jump through quite a lot of hoops to acquire it, the CEO said.
“We’ve kind of ran at it harder than most,” Pasricha said. Although he declined to offer specific terms of the deal, which closed late May, various sources have reported the price paid was approximately £65 million ($102 million).
The investment will be worth it, he said. The brand, which eschews the highest “annoyance factors” of a typical hotel stay, such as expensive Wi-Fi or an exclusive, club-like atmosphere, should translate effortlessly in emerging cultural epicenters in major cities.
London’s Shoreditch neighborhood is the perfect example, sources said. While not in the heart of London, the area is vibrant and up-and-coming. It fits the Hoxton personality and design aesthetic—urban, industrial, with exposed brick walls and comfortable leather furniture.
“We try and stay away from being on trend. We’re not about setting trends. We’re about timelessness and being classic,” Pasricha said.
The group is targeting similar off-the-beaten path locations in markets such as Paris, Amsterdam, Barcelona, Spain and New York.
“It’s a product that works in any urban center,” Pasricha said.
Growth will come from a combination of new builds and conversions, he said, although there is nothing in the works at the moment. The team is focused on operations at The Hoxton and making sure all of the pieces are in place.
That doesn’t mean opportunities haven’t presented themselves, Pasricha said. Ennismore has received many calls from investors eager to jump on board.
However, the first few deals likely will be done internally. “We want to make sure DNA of the brand is consistent and successful” before handing off the concept to a third party, he said.
The first foray
Though The Hoxton represents the firm’s first foray into the hospitality sector, the Ennismore team is not lacking in experience.
Its advisory board comprises Simon Sherwood, former president and CEO of Orient Express Hotels; Lorenzo Grabou, former partner at Goldman Sachs; Glyn Aeppel, former CIO of Andre Balazs Properties; and Mark Aldridge, CEO of private-equity firm Better Capital.
“We kind of went out and looked for what we believe are people that are industry leaders in their various fields, but more importantly people that have maintained strong relationships,” Pasricha said of the board.
“They are very much a guiding force for me,” he added—one that will propel the Hoxton brand to strong growth.
Although he declined to share specific expansion goals, Pasricha said his aspirations are global.
“The Hoxton is a phenomenal brand that has been a fantastic success in London,” he said. “I would love and genuinely believe that we have the capability and the management bandwidth and the brand to make this into a global foray into the luxury budget sector.”