Ace Hotels: An Ongoing Mess?
A Pattern of Closings
It appears the Ace Hotel group is still struggling to recover from the depressed travel levels of the pandemic. While researching future writeups, I found articles detailing the closure of several Ace Hotel locations over the last five years. Most of the articles came from local outlets and specifically focused on the closure of the Ace Hotel in that city or region. That said, I'm surprised there is not more coverage tying it all together, given that at least six Ace hotels - 40% of the group's entire portfolio at its peak - are no longer. Since 2020, the Ace Hotel group has seen its properties in London, Chicago, Pittsburgh, Los Angeles, Portland, and most recently, its two New Orleans properties all close their doors. Naturally, this raises questions as to the future direction of the hotel group.
Brief History on Ace Hotels
Bursting on the scene in 1999, the Ace Hotel group is a niche operator of mostly urban hotels whose brand perfectly (and I have to imagine, purposefully) mirrored the rise of the holier-than-thou-hipster of the 2000s and 2010s. The hotel group notably eschewed new construction, choosing instead to renovate historic, artsy, and sometimes ironic buildings. (The Ace Hotel London was previously a music hall, the Ace Hotel & Swim Club in Palm Springs was formerly a Denny's restaurant, and the Ace Hotel Seattle was once a Salvation Army halfway house). Design and 'vibe' feature prominently at Ace Hotels, sometimes in place of practicality. If you've ever walked into one of those 'open-plan' suites where the exposed toilet ensures that 'bathroom is now a group activity'...you can thank the Ace… they're the resident 'thought-leaders' in the space.
Founded by Alex Calderwood, Wade Weigel, and Doug Herrick, the hotel group's ownership is now almost entirely owned by current Ace Hotel CEO Brand Wilson and Stefanos Economou. Notably, back in 2013, Calderwood was found dead at the Ace London Shoreditch mere months after the hotel opened. At its peak, the hotel group opened hotels across four continents in cities such as Sydney, Australia, and Kyoto, Japan. The Ace Hotel Los Angeles would become something of an institution for the brand, famed for its celebrity sightings and rooftop hangout spots. Snappy partnerships would become a key draw for the hotel group, striking deals with brands like Stumptown Coffee and various buzzy local chefs and restaurant groups.
Behind the closings
Ace Hotel group has yet to address the spree of closures as a whole, though spokespersons for the brand have commented at the time of each individual closure. It sounds like the pandemic hit the hotel group hard and never recovered. Ace Hotels are not set up to reap convention revenue or geared towards your standard business traveler. Leisure tourism was likely a good share of their bottom line. All of that gone overnight? Troublesome. Many of these now-closed Ace Hotels were located in their respective cities' trendier, lively districts, areas that famously suffered during lockdown. Additionally, it's not a surprise that the Ace's in mid-major cities - like Pittsburgh - had a tough time righting the ship. Those properties don't share the immediacy of tourism their New York or Kyoto counterparts have. Additionally, if the hotel group had already been in a precarious financial position before the pandemic, lockdown might have been the nail in the coffin.
We can't say for sure what caused all the closures, but we do know that some of them were abrupt—to the point that some guests who had booked weddings at the Ace Pittsburgh were left in the dark, fighting to get their money back. Yikes.
What's Next For Ace? - New Places, New f-ACE-s?
First off, sorry - had to. Interestingly enough, despite all the closures, the group welcomed a new hotel in 2024, the Ace Athens. There are also plans to open a second Japanese location in Fukuoka. However, recent reports of a failed $85 million deal with Sortis Holdings to purchase Ace’s current portfolio make it feel like the team may not know which way is up. (For what it’s worth Sortis had previously purchased just the Ace Portland in a separate deal and is no stranger to hard times itself) . This only increases speculation as to what direction the Ace Hotel group is headed.
And the fate of the former hotels? It's been a mixed bag. Two locations, Pittsburgh and Los Angeles, are now managed by Kasa, an increasingly more prominent player in the hybrid short-term-managed-apartment-hotel-living space. For all my points and miles enthusiasts, you'll be happy to know that the two former Ace New Orleans locations are now part of the Hyatt family - rebranded as the Maison Métier and Barnett properties. As a bonus, they are part of the elusive core 'Hyatt' brand, giving Hyatt loyalists two more opportunities to check off that elusive Hyatt Brand Explorer box.
This begs the question—will we see one of the bigger hotel chains acquire what remains of the current Ace Hotel group? We’ve already seen Hyatt snap up Standard Hotels - another hip hotel brand with around the same number of locations, and to me at least, has a similar feel to the Ace. Who knows? I'm good with anything as long as we leave the open-toilet concept as a relic of the past.