Seibu Holdings moved to acquire New York-based Ace Group International for $90 million (¥13.2 billion), stepping in to rescue the struggling boutique hotel operator after a previous sale collapsed.
The Japanese company’s subsidiary, Seibu Prince Hotels Worldwide, will complete the acquisition through a newly established U.S. entity by month-end, according to Tuesday’s announcement. The deal includes Ace Hotel’s eight properties and its creative agency Atelier Ace.
Ace Hotel’s financial troubles became apparent when Portland-based Sortis Holdings abandoned an $85 million acquisition in late 2023. The boutique chain subsequently lost management contracts representing more than 20% of its portfolio and faced the departure of key executives, industry sources said.
For Seibu, which operates 86 hotels alongside golf courses and ski resorts across Asia-Pacific, the acquisition represents a bet on Western lifestyle hospitality expertise. The Tokyo-based operator has ambitious plans to reach 250 hotels by 2035, requiring significant overseas expansion.
The combined entity will manage 94 hotels with seven additional properties under development. However, integrating Ace’s design-focused, culturally-driven approach with Seibu’s traditional Japanese hospitality model presents operational challenges.
Ace Hotel, founded in Seattle in 1999, built its reputation around converting historic buildings in trendy neighborhoods, but struggled financially during the pandemic as urban tourism declined.
