Blackstone, a major real estate investor, announced on Wednesday the acquisition of Village Hotels from KSL Capital Partners, a private equity firm specializing in travel and leisure. This move broadens Blackstone’s presence in the British travel sector in response to a growing consumer preference for experiences over material goods. While the financial details were not disclosed, sources suggest the deal is valued at approximately $1 billion.

This acquisition underscores Blackstone’s optimism towards experiential hospitality and leisure, particularly within the UK market, as it adds 33 properties in key regional cities and suburban areas to its portfolio. Village Hotels, renowned for modernizing the full-service hotel model to cater to the hybrid work environment, offers a unique blend of traditional hotel accommodations, fitness facilities, dining options, and co-working spaces. By reinforcing its investments in the UK leisure industry, including the recent purchase of Bourne Leisure in 2021, Blackstone is showcasing its commitment to this market. This transaction marks KSL Capital Partners’ exit after acquiring Village Hotels in 2014 and contributing to its growth to over 4,400 guest rooms.

There is optimism among analysts that hotel sector deals will increase if the U.S. Federal Reserve starts reducing interest rates this year. This potential rate cut could boost confidence among dealmakers in the U.S. and Europe, potentially leading to a 15% to 25% rise in global hotel transaction volumes compared to the low levels seen in 2023. James Seppala, Blackstone’s head of real estate in Europe, recognizes the promising opportunities in lodging and leisure, while Gary Davis, CEO of Village Hotels, anticipates expanding the brand’s hotel presence in the UK. Blackstone’s interest in the travel sector extends beyond this acquisition, with recent investments in Japanese hotels and previous acquisitions like Extended Stay America.

Through investments in G6 Hospitality, SiteMinder, Cvent, and Bourne Leisure, Blackstone continues to demonstrate its significant presence and influence in the global hospitality industry.