Skift Take
LVMH might not have been the most obvious of suitors for Belmond's luxury assets, but now that it's close to owning them, it's a deal that makes a lot of sense in this post-experience economy still contending with the concept of new luxury.
In the luxury hotel space, AccorHotels and Marriott have some new competition.
French luxury conglomerate LVMH, the company behind such iconic brands as Dom Perignon and Louis Vuitton, wasn't the most obvious of suitors for the storied Belmond collection of 46 luxury hotels, trains, and cruises, which were formerly known as Orient-Express.
In fact, most in the real estate and hospitality and travel industries assumed that the usual suspects, such as Blackstone, KSL Partners, or maybe even Hilton, would wind up owning a piece of Belmond.
But now that LVMH has officially inked a $2.6 billion all-cash agreement with Belmond, its move to make Belmond a part of its relatively small but growing hospitality business makes all the more sense as LVMH hopes to "reach a critical mass in the ultimate hospitality world," as Chris Hollis, LVMH director of financial communications, remarked during a Friday conference call regarding the acquisition.
Why This Deal Makes Sense
In addition to owning brands like Christian Dior, Hennessy, Veuve Clicquot, and even cosmetics retailer Sephora and luxury luggage maker Rimowa, LVMH has its own relatively small but growing hospitality unit that includes the Cheval Blanc brand of four maisons and the Bulgari brand of hotels, which is distributed via a partnership with Marriott International and has six locations.
As luxury consumer tastes evolve and the desire for more experience-driven luxury grows as Millennials and Gen Z dominate the market, it only makes sense that LVMH would explore luxury experiences beyond products or hard goods.
LVMH Chief Financial Officer Jean-Jacques Guiony said on the same conference call Friday that LVMH was moved to buy Belmond not because it saw a lack of "opportunities in traditional luxury goods" but because "the future of luxury will be not only in luxury goods as it's been for many, many years but also in luxury experiences and we want to be in both segments, which is as simple as that."
“This is a great move for LVMH and helps to solidify the future of Belmond," said Becky Powell, president of luxury travel agency Protravel International. "Consumer interest is shifting from goods to experiences and this acquisition positions LVMH to bring the two to
