Weeks after acquiring the rights to Graduate Hotels, Hilton announced it has acquired a controlling interest in Sydell Group that will allow it to expand the NoMad Hotels brand with an expectation to grow it to as many as 100 hotels. The deal is significant for Hilton as it allows the lodging company to reach into the coveted luxury lifestyle hotel space, something its president and CEO, Chris Nassetta, has referenced in the months leading up to this deal.
NoMad’s first hotel was in New York and was part of a lodging development movement just south of Herald Square along Broadway. It was located just arounnd the corner from the Ace Hotel. However, the hotel closed permanently amid the COVID-19 pandemic. It later was converted into The Ned, a Soho House-operated hotel and members club.
Meanwhile, NoMad Las Vegas was excluded from the transaction and will rebrand under a new flag in the coming months.
Financial terms of the deal were not disclosed.
While Hilton will lead development, NoMad will be in charge of the brand’s design, branding and management. NoMad will be fully integrated into Hilton’s commercial platforms, including Hilton Honors.
The hotels will continue to be independently owned. Hilton said it anticipates nearly 100 NoMad hotels to be developed globally, with 10 already in advanced stages of discussions with Sydell.
“Adding NoMad to our growing brand portfolio will create new offerings for guests seeking unique luxury experiences in some of the world’s most desirable locations,” said Chris Silcock, president, global brands and commercial services, Hilton. “By pairing an already proven brand concept that’s ready for expansion with the power of Hilton’s commercial engine, we are accelerating our ability to drive growth in the luxury lifestyle segment.
NoMad opened its flagship hotel in London, NoMad London, in 2021. The hotel will be available for booking for Hilton guests from later this year. NoMad hotels will be inducted into Hilton’s guest loyalty program, Hilton Honors, which has a portfolio of over 7,500 properties worldwide.
Led by founder Andrew Zobler, Sydell has developed seven lifestyle brands in the last 10 years, including NoMad, The Line, Freehand and The Ned. Based on the idea of the hotel as a “great home,” NoMad aims to provide guests accessible luxury, unique designs and diverse F&B options, said Zobler.
“Hilton’s expertise in both luxury and lifestyle, paired with its track record in scaling brands, makes for an exciting opportunity. We look forward to seeing NoMad expand into sought-after neighborhoods all around the world,” Zobler said.
The addition of NoMad into Hilton’s collection of hotels adds another luxury offering and complements its existing portfolio of luxury brands – Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, LXR Hotels & Resorts and Signia by Hilton.
Hilton’s growth has traditionally stemmed from launching new brands, as opposed to acquiring other brands. However, the past few months have seen the lodging company expanding its portfolio through several acquisitions. In March, Hilton acquired the rights to Graduate Hotels, a brand with over 30 hotels located in and around college markets, for $210 million. In February, Hilton grew its luxury portfolio with the strategic partnership with Small Luxury Hotels of the World. Later that month, Hilton collaborated with outdoor hospitality company AutoCamp to offer enhanced outdoor lodging experiences in unique destinations.
A note released by Truist Securities after the NoMad deal was announced stated that NoMad is projected to gear more to gateway urban markets than resorts. Hilton has historically lagged its global C-corp peers in the luxury space, Truist said, adding that NoMad’s addition to its collection fills one of the most significant gaps, especially for Hilton Honors redemptions.
Hilton has been trying to dip its toes into the luxury lifestyle segment for months, Truist said. In terms of development growth, the partnership is another “brand in the quiver” for Hilton to maintain a 6-7% net unit growth over time.