LONDON—Owner and developer Ennismore, the firm behind The Hoxton brand and the owner of Scotland’s Gleneagles Hotel, has launched NoCo, its new low-cost brand.
According to Ennismore executives, NoCo hotels will be established in partnership with local restaurants and have properties with between 150 and 200 rooms. Approximately 25 second-tier United Kingdom cities will be targeted in its launch’s first phase, with the first NoCo to open in 2018.
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Ben Russell, Ennismore |
Ben Russell, Ennismore’s acquisitions director, said the concept of NoCo is to challenge what he called the “existing vanilla offering in the budget sector.” That means developing hotels that provide a lot more than just a place to sleep.
“NoCo will challenge this through great design, vibrant public spaces that feature an exciting, local food-and-drink offering, live music and events that appeal to guests and locals alike,” Russell said.
Sharan Pasricha, founder and CEO of Ennismore, has described his company as “part developer, part operator, part creative studio.”
The Hoxton brand has three properties—two in London (one in the Hoxton neighborhood that gave the brand its name) and the other in Amsterdam—and has four projects in its pipeline, including another property in London and one each in Paris, Chicago and New York City.
“The Hoxton and NoCo are two entirely separate brands, with NoCo solely focused on the budget sector,” Russell said. “With land prices in central cities at an all-time high, it is highly unlikely that a NoCo will operate in the same location as a Hoxton. We like to think of NoCo as The Hoxton’s cheeky younger sibling.”
Russell said NoCo’s average daily rates would be less than £100 ($137).
As for expanding the Gleneagles (which the company acquired last summer) into a wider brand, Ennismore said that’s not on his immediate to-do list. Right now the hotel is undergoing the first phase of a refurbishment project, which has seen the renovation of 35 keys and the main bar, plus the addition of a new bar.
“Whilst we recently acquired the neighboring farm and have some ambitious plans there … we want to build on the legacy of this iconic Scottish landmark before we think about exporting the brand,” Russell said.
Industry impact
Harry Douglass, associate director, hospitality, at hotel consultancy HVS, said Ennismore’s entrance into the budget space bodes well for the industry.
“When thinking about developing budget lifestyle, and what is required to make it to work financially, Ennismore does come to mind, as it has a longer financial investment perspective, not the five- to seven-year investment horizon that seems to be the norm,” Douglass said. “It will take longer from them to find location opportunities, as they will be competing with least-service providers, which can offer owners immediate comfort and developers looking for value.
“It takes years to build a brand, and (Ennismore) is one of the very few providers who are willing to take their time,” Douglass added.
Despite potential barriers, Douglass said he is convinced the market will respond favorably.
“But if (we) take a step back and see it from the position of a 25-year-old person, this is exactly the kind of place they want to be in,” Douglass said. “The (budget) space is not crowded but just has a lot of choice, which is great.”
Douglass envisaged NoCo to be a “value-led brand that moves with improvements in its neighborhoods, which is the right approach, or they would be competing with the larger networks. I think it is a shrewd move, very exciting, and with a broad target market.