LVMH teams up with Accor to accelerate the growth of Orient Express

Accor's Orient Express brand, renowned for its trains and recently branching into hotels and superyachts, now welcomes a new luxury partner.

On Thursday, the companies announced that LVMH, the French conglomerate behind iconic names like Louis Vuitton and Christian Dior, is making a 'strategic investment' in Accor's Orient Express brand. The revitalized ultra-luxury brand aims to operate three hotels by 2025, along with two trains and a sailing vessel by 2026, currently being built in Saint-Nazaire, France.

'Orient Express has been a legend since its inception 140 years ago,' stated Accor group chairman and CEO Sébastien Bazin in a statement. 'With Orient Express, Accor is redefining the art of travel, adventure, and grand journeys. Today, with LVMH, we are embarking on a new chapter in this thrilling voyage, aiming to explore new horizons and embody the boldness and creative spirit that inspire our companies. We are excited to leverage LVMH's exceptional expertise to further elevate this legend and bring it to life in an even more unique way.'

Accor purchased the Orient Express brand in 2022, and LVMH's new role is designed to provide its 'distinct expertise in premium products and services.' However, LVMH's decision to collaborate with Accor may raise eyebrows, as it also owns Belmond, which runs the Venice Simplon-Orient-Express train. This could potentially position them as competitors to Accor's Orient Express trains once they start operations.

The joint announcement suggests that LVMH's experience with Belmond is ultimately beneficial for Accor's Orient Express ambitions, showcasing the six luxury train services Belmond operates globally.

'These remarkable experiences demonstrate the operational expertise and creativity of LVMH Hospitality Excellence in this arena,' states the Accor-LVMH announcement.

'Since its inception, Orient Express has represented adventure and sophistication,' said LVMH CEO and group chairman Bernard Arnault in a statement. 'Its name is woven into our cultural fabric and inspires some of the greatest artists. Orient Express exemplifies refined living and the bold spirit that fuels our Houses. We are thrilled to partner with Accor to rejuvenate this travel icon, combining our expertise to elevate Orient Express to the pinnacle of hospitality.'

There is also a possibility that LVMH views this partnership as a chance to clarify the confusion surrounding various operators of Orient Express-branded trains worldwide. LVMH has a vested interest in crafting a cohesive vision for Orient Express while upholding the high luxury standards synonymous with its brand. Additionally, the train could act as a platform to promote other LVMH offerings, such as Dom Perignon, Veuve Clicquot, and its other wine and spirit labels.

"I doubt LVMH aims to become a significant player in the travel industry; rather, it views high-end experiences as complementary to its core business. Thus, it focuses less on brand overlap and more on marketing its premium champagne," stated Richard Clarke, a managing director specializing in hotels at AB Bernstein, an asset management firm.

Over the years, there has been speculation in the industry regarding LVMH's future partnerships with hotel giants like Accor or Marriott to develop additional hospitality brands. Since 2001, LVMH has maintained a light partnership with Marriott for Bulgari Hotel & Resorts, which doesn’t participate in Marriott Bonvoy, and is now leveraging that unique French synergy with Accor, based in Paris.

However, don't interpret the Orient Express collaboration as an indication of an imminent expansion of LVMH's partnerships with hotel conglomerates.

"The optimistic perspective is that this suggests LVMH might be interested in a broader role within Accor's luxury segment, but Orient Express is positioned at the very top and has notable brand synergy," Clarke remarked. "I wouldn't read too much into this partnership beyond what it is."