Sharan Pasricha is an extraordinary man. He’s charming too, but he’s also one of the most driven men I’ve met. How else could somebody take a mere 10 years to go from buying the first (and at that time only) Hoxton Hotel, in Shoreditch, to creating a lifestyle hotel business with an enterprise value of €2 billion. And all this by the tender age of 41.
It feels as though it happened very quickly. First, he set about turning the Hoxton – acquired for £65 million in 2012 from Pret A Manger co-founder Sinclair Beecham – into an international chain.
Seeing as he was a non-hotelier, most people would have predicted that he’d bring in an experienced hotel sector veteran as CEO. But no.
Instead, Pasricha spent a year virtually living in the hotel, deploying his intellectual curiosity - “tweaking, changing and learning everything there was to learn”.
One important thing he did was to play around with the F&B offer, running the restaurant as part of the hotel then signing up Soho House to run it. He was then able to judge which method was not just more profitable but more in tune with his plan to make Hoxtons a home away from home – and an inexpensive one at that.
Armed with his new Hoxton blueprint, the entrepreneur set about acquiring and redeveloping new properties. And he didn’t hang about – properties soon followed in Holborn, Amsterdam, Paris, Williamsburg, Portland and beyond.
He also continued to refine the concept, recognising that value for money does not preclude a bit of luxury.
“We’ll always be accessible and affordable but I don’t think we’re going to be budget,” he said. “We’ve kept the very transparent, honest pricing: we don’t charge for things we shouldn’t, so we don’t charge for wi-fi or bottles of water. Bedrooms are beautifully designed: small, but with everything you need, with a really big focus on the shower and the bed.”
Not being short of ambition, it was no surprise to hear him reel off a list of potential cities then declare: “There could quite easily be 100 Hoxtons in cities around the world.”
Another way in which he seeks to ensure he’s providing guests with exactly what they want is by interacting with local people even before the hotel has opened – getting them to pick the books that will go in the bedrooms and helping with food and cocktail tastings.
Pasricha has also differed from most of his peers is by acting as developer and designer of the Hoxton properties as well as owner and operator. He even created his own design studio in Clerkenwell with a creative team put together mostly with people from outside the hospitality industry. That way, he is able to keep a firm grip on the project, ensuring that hotels turn out exactly as he wants them – and, of course, he creates the potential to end up with a very valuable asset.
The youthful entrepreneur also popped up as the surprise buyer of Gleneagles in 2015 when Diageo put it up for grabs. Pasricha saw an opportunity to acquire a unique asset (that had just hosted the Ryder Cup) with a name known throughout the world – a name that he felt was a “sleeping giant” with the potential to be deployed on a wider basis.
Sure enough, he has turned the listed former Bank of Scotland building in Edinburgh’s St Andrew Square into Gleneagles Townhouse, with bars, restaurants and a members’ club, and opened a new private members club – Maison Estelle - in Grafton Street, Mayfair, “inspired by the Gleneagles Hotel in Scotland”. And he has created Gleneagles & Co, a range of fine foods and leather goods available online.
While the pandemic was devastating to the hospitality industry, Pasricha appears to have prospered, ploughing ahead with his grand strategy. In November 2020 he peeled off the assets relating to the Hoxton and Gleneagles businesses and entered talks on injecting the operating business into a joint venture with Accor’s lifestyle hotels division.
Covid did slow down the negotiations, but it took until October last year for the two sides to finally sign on the dotted line. At a stroke, Pasricha had created a business that, once the pandemic was in the rear-view mirror, would be worth more than €1bn, with the Indian-born Brit sitting on a third of the company, a stake worth more than £300m.
At the time of the completion of the Accor deal, the joint venture comprised 87 hotels with 150 restaurants and bars under 14 brands.
All of which sounded pretty amazing, but this month the joint venture did something even more amazing by selling a 10.8% stake to a Qatari consortium for €185m, to include €20m of Shari’a compliant financing by Qatar First Bank.
The implied valuation is €1.7bn, or about €2bn including debt. In other words, the value of the joint venture has doubled in less than a year. And even after cutting his stake from 33.3% to 27% as part of the Qatari deal, Pasricha retains a stake with a current valuation of about €460m – which would be impressive even without the removal of the property assets from the equation.
Those assets were for the most part funded by his father-in-law, Sunil Bharti Mittal, who made his fortune building India’s biggest telecoms company (and has no connection with the steelmaking Mittal family).
When I interviewed Pasricha three years ago, he estimated that the assets, in which he has a small stake, could soon be worth $3bn [CORRECT in $] as the remarkable growth rate continues.
The joint venture has a committed pipeline of more than 100 hotels and the big question is: if he’s not already a billionaire, when will Pasricha become one?
- Dominic Walsh is a business reporter at The Times
