AccorHotels continues to boost its exposure to the luxury vacation rental market, as the Paris-based hotelier jockeys for a bigger share of the North American market by expanding beyond its core hotel business.
The company, whose brands range from the Pullman luxury badge to the Ibis economy brand, earlier this month started "exclusive negotiations" to acquire Atlanta-based Travel Keys, which sells reservations for more than 5,000 curated villas in more than 100 global destinations.
AccorHotels expects the acquisition, at an undisclosed price, to close by the end of June.
The acquisition is expected to complement Onefinestay, the high-end, peer-to-peer accommodations service that AccorHotels acquired last year for about $169 million. Onefinestay, which has an inventory of about 2,500 homes in six markets, has said it wants to broaden its geographic reach to 40 global markets by 2021.
Additionally, AccorHotels bought a 49% stake in Paris-based upscale home-listing service Squarebreak last February. In all, AccorHotels said earlier this month that the three companies will add about 8,500 luxury vacation rental units to the hotel operator's inventory.
AccorHotels continues to aim for a bigger chunk of the Americas' travel market through acquisitions, and it appears to be aiming for the higher end of the economic spectrum. Last year, the company acquired FRHI Hotels and Resorts, parent company of Fairmont and Raffles, for $2.7 billion, doubling its luxury-hotel inventory in the process and tripling its U.S. hotel count.
Prior to the acquisition, AccorHotels, which in 2012 sold the Motel 6 budget chain to Blackstone Group for $1.9 billion, had just seven hotels in North America, including five under AccorHotels' Sofitel brand and one each under Pullman and Novotel. (AccorHotels also has a minority stake in the Mama Shelter brand, which has one property in Los Angeles.)
With Marriott International acquiring Starwood Hotels & Resorts last year to extend its lead as the world's largest hotel company, and with Hilton Worldwide regularly adding brands to try to narrow the gap, AccorHotels is among the global operators looking for ways to keep up. While AccorHotels oversees about 4,000 hotels worldwide, Marriott has more than 6,000 and Hilton has more than 4,900.
Douglas Quinby, vice president for research at Phocuswright, said that travelers "stay at different types of properties for different trips. Sometimes they go upscale, others they economize and, increasingly, they want a rental. Portfolio expansion is all about having more roofs under the sun for travelers and especially their coveted loyalty program members."
Kevin Frid, AccorHotels' COO of its North America region and former president of FRHI's Americas region, said that AccorHotels CEO Sebastien Bazin's background as a private-equity executive with Colony Capital has served the company and its expansion strategy well.
"He came from a world of acquisitions and deals and brought that strategy to Accor," Frid said in an interview at the Americas Lodging Investment Summit in Los Angeles last month. "The goal is to be a total travel solution."
The strategy appears to be an extension of a goal it set in mid-2015 to triple the number of properties accessible through its website to more than 10,000. The hotel company said at the time that it would add independent properties and hotels outside of its core brands in order to reach that goal.
AccorHotel's acquisitions haven't been limited to companies operating primarily in the U.S. and Europe.
In December, it said it would invest about $17 million in Singapore-based Banyan Tree Hotels & Resorts, and would co-develop and manage future resorts under Banyan Tree's four brands. Banyan Tree's properties are primarily in China and Southeast Asia.
Still, while AccorHotels' revenue for 2016's third quarter (the most recent quarter traced) rose 3% from a year earlier, revenue for its Americas region jumped 21% from a year earlier, to $205 million.
With a broader selection of vacation rental properties, AccorHotels is counting on higher-end travelers to take advantage of the affiliation between traditional entities such as Fairmont and newer types of luxury accommodations services such as Onefinestay and Travel Keys.
"We're truly successful if a customer knows that whatever their travel need, they have the solution by going to Accor," Frid said.