Boutique Hotel Group Experimental Targets US After €350m investment
Main Photo: Il Palazzo Experimental, Venice
Date: December 2021
Name: Experimental Group
Locations: USA, UK
Number of Keys: N/A
Seller: Experimental Group
Buyer: Brookfield
Commercial real estate group Brookfield has made a $350 million investment in European hospitality firm Experimental Group. That deal is expected to enable Experimental to open as many as 15 new hotels, mostly within the U.S., by 2024.
Experimental Group, which owns the Hotel des Grands Boulevard and Experimental Cocktail Club in Paris, is focusing on New York and the West Coast for its American expansion as well as five UK sites. The company’s U.S. presence now is limited to La Compagnie des Vins Surnaturels Centre St., a restaurant in New York City.
Brookfield’s backing also enables Experimental Group to buy hotels instead of its existing business strategy of leasing them. Experimental’s hotel portfolio today includes six properties in mainland Europe as well as one in London – a small boutique hotel called The Henrietta Hotel.
The Experimental Group was founded by Olivier Bon, Pierre-Charles Cros and Romée De Goriainoff, three childhood friends with a taste for innovation. Passionate fans of the craft cocktail culture that was growing in New-York and London, and confident that Paris could rediscover its own lost heritage of mixed drinks, they opened the Experimental Cocktail Club in 2007 on a small side street in Paris and changed the face of the city. Expanding the team in 2010, Xavier Padovani came on board as the group’s fourth partner, adding to the group’s shared vision: to offer a contemporary hospitality experience to an exacting clientele the world over. Small producers and seasonal sourcing reigns, whether in food, spirits or wines. And discovery is key, both for our guests and our ever-growing team of bartenders, sommeliers, chefs, concierges and support staff.
Still celebrated for bringing the cocktail bar culture to Paris, the group’s offerings now encompass their signature speakeasies, wine bars, restaurants and hotels in Paris, New-York, London, Ibiza, Menorca, Venice and Verbier.
“[Before] effectively I created a lot of value for the landlord and in exchange the only right I have is to pay rent,” Experimental co-founder Pierre-Charles Cros told the Financial Times.
Private equity dollars pouring into hospitality is becoming increasingly common, as investors want to capitalize on the upside of the recovering sector. Fortress Investment Group bought a majority stake in Irish hotel and serviced apartment platform PREM Group earlier this month,
Blackstone has been among the most active in the space, scooping up Extended Stay America in a joint bid with Starwood Capital early in the pandemic and also focused on the casino resort sector with multiple deals in Las Vegas as well as contentious bids for troubled Australian company Crown Resorts.
Brookfield is a significant backer to help fuel Experimental Group’s expansion into the U.S., but keep in mind: This is a highly competitive environment with major brands controlling a hefty share of the market.
That ices out major competition like Accor, which has a similar lifestyle hotel focus as Experimental Group and has struggled to gain much traction in the U.S.
Price: $350 million
THPT Comment: The appeal of both the boutique and extended stay segments continues to grow, as does competition. Quite a coup to get such an investment from Brookfield.
First Seen: Financial Times
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