Yahoo Finance Accor’s Hotel Owners Are Clamoring to Become Lifestyle Brands
Accor’s CEO is steering the brand towards more luxury and lifestyle properties. Fortunately, hotel owners are more than obliging.
“I’ve been at the helm of this company for the past eight years, and I’ve been trying to wake up a sleeping giant, which Accor has been for a number of years,” Sebastien Bazin told Skift’s hospitality reporter Cameron Sperance at Skift Global Forum on Thursday. “I decided eight years ago to be asset light, and it was five years of pain.”
Shortly after, however, the pandemic struck — which coincided with his plans to move away from Europe, and move higher up from mid-scale hotels. Following a restructure, ultra luxury and lifestyle hotels became independent divisions. And in November, Accor continued its focus on lifestyle brands by announcing plans to join forces with Ennismore, the owner of Hoxton Hotels.
Are they the segments with the most growth potential, Sperance asked. Is there lender appetite for a relatively new concept?
“Two thirds of my existing (hotel) owners are interested to go into lifestyle,” Bazin said. “We actually feed them with new lifestyle and luxury brands, which they never had the capacity to offer before.”
In terms of the numbers, the CEO said that last year, 90 percent of revenue came from just 10 Accor brands, out of 40. But in the future there’ll be less revenue concentration. “This year, it’s 80 percent from those same 10 brands,” he said. “In three years, it will be 60 percent.”
There are currently 13 lifestyle brands, which represent less than 2 percent of Accor’s room count, but 5 percent of fee volume, Bazin noted. “In the last two years, they’ve represented 30 percent of the fee stream for the years ahead, and that could go up to 40 percent,” he added.
However, for emerging destinations, such as South America, Southeast Asia and Africa, Bazin said he continued to pay a lot of attention to the legacy brands. ”This is my engine when I go to emerging countries … those brands are extremely valuable, because we know what works and it’s a good return for the investor.”
The U.S., though, remains a tougher market to crack. Bazin said that the portfolio was perfect — almost.
“There’s no empty hall I want to fill. I know exactly what I want to build. It’s close enough to have the perfect portfolio… but I wish I could be bigger in America,” he said. “We tried, and we failed.”
He also joked that his rivals had been “crushing” him in China as well as the U.S.
“I won’t crush them, as Europe is big,” he said. “But there’s a lot of respect between the groups.”
Greener Goals
As rival Marriott embarks on a net-zero mission, Accor on Tuesday joined the Sustainable Hospitality Alliance, a global organisation that brings together hospitality companies and uses the industry’s collective power to address challenges affecting the planet.
The alliance is also aligned with the United Nations Sustainable Development Goals, which commit to pilot continued actions on a range of social and environmental issues including human rights, youth employment, climate action and water stewardship.
When challenged if growth is compatible with this type of eco-alignment, Bazin said Accor had been aware of sustainable hospitality for decades. “We hire 80,000 people every year,” he said. “We know quite a bit about how to be respectful, it’s part of our DNA.”
He added that expansion would be stemmed at some locations, but for the right reasons. “We’ve stopped more deals than before,” he said. “I was in the south of Europe, and spent two and a half hours walking on the site, (and decided) we should not be sacrificing that land.”
Subscribe to Skift newsletters for essential news about the business of travel.
