LVMH is set to buy hotel group Belmond in a deal worth $3.2bn

Hotel group Belmond is set to be acquired by LVMH for $3.2bn (£2.54bn) as the world's largest luxury group bolster their hotel portfolio. 

LVMH already owns Cheval Blanc hotels in Courchevel, the Maldives, Saint-Barthélemy and Paris as well as owning Bulgari Hotel and Resorts and will now add Belmond's hotels across 24 different countries to its ranks. 

It is now also set to own the Copacabana Palace in Rio de Janeiro and Hotel Splendido in Portofino as well as train services like the Venice Simplon-Orient-Express and Belmond Royal Scotsman, and cruises such as Belmond Afloat in France and Belmond Road to Mandalay.

LVMH saw off competition for the purchase of Belmond, including from private equity firms, while the total value of the deal will also cover the acquisition of the company's debt. 

It comes as companies seek to tap into the experience side of luxury, rather than possession based, following an increasing demand for luxury hotels, travel and food. 

Paris-based LVMH, which owns luxury brands such as Louis Vuitton and Christian Dior, said on Friday that it was acquiring the Belmond group at $25 per share, $7 more than its closing value on Thursday. 

It means the total value of the company lies at $2.6bn in the deal but that rises to $3.2bn when debt is taken into account. 

According to Grand View Research, the luxury hotel market is expected to grow at a compound annual rate of 4.3 per cent and will be worth $115.8bn by 2025.