Adagio, the joint venture between Accor Hotels and the Pierre & Vacances Center Parcs Group, has acquired hotel management chain Citéa for an undisclosed fee, taking its estate to 84 residences.
The group, which has aparthotels in France, Belgium, Germany, Austria, Italy and Switzerland, said that it was focused primarily on Europe, but would move into Russia and the Middle East.
Adagio said that the deal, which takes it to 10,000 apartments, made it the European market leader in urban tourism residences, with sites under Adagio's name generating Eu160m. By 2015, the group plans to manage almost 130 residences and generate Eu330m.
Citéa operates 49 aparthotels in the economy segment on behalf of Pierre & Vacances, Lamy and other third-party investors. Under the terms of the deal, Pierre & Vacances Center Parcs Group acquired the remaining 50% of Citéa which it did not already own from Lamy, then sold Citéa to Adagio.
Adagio is Pierre & Vacances Center Parcs' fastest-growing brand, having been set up in 2007 by a joint venture between Pierre & Vacances Center Parcs and Accor to operate and develop a European network of aparthotels. Both Adagio and Citéa properties will be put under the Adagio brand, but, the group said, a new brand label would differentiate the Citéa properties.
The joint venture identified increasing international mobility and rising demand in business and leisure travel as the driving forces for the development of the aparthotel sector.
Accor has other interests in the aparthotel sector, including its Suites Novotel brand, which has 28 properties offering a two-star medium stay product and Studio 6, an extension of its Motel 6 brand in the US and Canada, which has seen performance suffer during the downturn and has been the subject of rumours that the group was planning its sale.
News of the deal came as Pierre & Vacances Center Parcs reported half-year results, which saw like-for-like turnover increase by 14.1% to Eu653.1m. At the Pierre & Vacances Tourisme Europe division, city residences saw turnover growth of more than 10% (excluding new residences) offsetting the effect of the decline in the group's mountain offering.
Looking to the summer season, for Pierre & Vacances Tourisme Europe, reservations were up on the year, driven by seaside destinations, with a slight drop in the core summer period of July to August, due to the policy of reducing early booking offers for the high summer season in favour of occupancy.
The group is currently overhauling its operations, with the goal of an additional tourism turnover of Eu100m and a reduction in costs by Eu65m (including Eu15m of reduction in rents) by 2013.
For the joint venture, taking Citéa entirely into its stable gives it greater control over its future destiny, in addition to greatly increasing the visibility of the Adagio brand in Europe and now, it hopes, further afield. For both joint venture partners, this allows them to reduce the costs of expansion and brand-building, which, for Accor in particular, is in line with its current strategy.
The expanded brand now faces competition from the likes of Ascott, which last week announced a new site in Paris and is planning to grow in Europe, looking at key markets such as Paris, London and the major cities in Germany.