Skift Take
Can you ever really have the independence to do your own thing and have all that scale? SBE's Sam Nazarian will find out soon enough.
Is it really possible for hotel companies to retain creativity or innovation the bigger they get?
That's something the entire hotel industry seems to be asking itself these days, especially in the wake of a number of mergers and acquisitions — one of which was announced just this Monday when Hyatt broke news of its $480 million acquisition of Two Roads Hospitality.
Another deal that closed this week was the one between lifestyle hotel, nightclub, and restaurant company SBE Entertainment Group and French hospitality company AccorHotels on Tuesday. AccorHotels paid $319 million for a 50 percent stake in SBE, and SBE will continue to be run independently by founder and CEO Sam Nazarian. SBE's brands include SLS, Delano, Mondrian, Umami Burger, Katsuya, and Hyde.
Skift spoke to Nazarian on the day the deal closed, and while he was very optimistic about the future of SBE's new joint-venture with AccorHotels, he also expressed some concerns about the hospitality industry overall.
Nazarian, who founded SBE in 2002, said he worries that the industry, overall, is at risk of losing creativity and innovation with the increasing consolidation taking place.
"I think it's very dangerous if we all become Wal-Mart," he said of the hospitality industry.
"I think we are now, because of all this integration … we're more focused on brand standards and operating procedures," Nazarian said. "I call it the robotic nature of hospitality, versus an environment and culture where you're really enjoying being in the hospitality business. It's the basic fundamentals of hospitality."
He lamented the departures and minimized roles of hotel founders such as Andre Balasz of the Standard Hotels, and Jason Pomeranc, who founded Thompson Hotels, and said that one of the reasons why he pursued a joint-venture with Accor, as opposed to an outright acquisi
