[ad_1]
This year was supposed to be Accor’s year to get a taste of the pandemic recovery its American competitors experienced in 2021.
Despite war breaking out in Ukraine in recent weeks, the Paris-based hotel company shows no sign of backing down from its growth targets.
Accor CEO Sébastien Bazin, who is speaking at Skift Forum Europe on March 24, previously indicated the company was anywhere from nine to 12 months behind American competitors like Hilton and Marriott in recovery from the pandemic. Europe relies more on long-haul and cross-border travel — both of which were restricted during the worst of the pandemic — compared to the domestic-heavy U.S.
While Accor was still profitable last year and vastly improved from its 2020 loss, it wasn’t the kind of profitability achieved by American hotel companies. Marriott made a nearly $1.1 billion last year in profits compared to Accor’s roughly $95 million. But the European hotel giant has a strategy to throttle its business forward.
The company plans to beef up its lifestyle hotel portfolio, comprised of hotels catering just as much to nearby residents as they do to traveling guests. These hotels, spun off into a division with The Hoxton creator Ennismore, make as much as 60 percent of revenue from food and beverage offerings.
It isn’t entirely smooth sailing for Accor, though. The company increasingly faces competition from U.S. companies like Hyatt that are looking to beef up their own presence in Europe. The crisis in Ukraine could also lead to a setback in Eastern Europe, but performance data in recent weeks shows European hotels have yet to experience a downturn directly correlated to the war.
Bazin offered up some of his perspective on Ukraine, growth, and the recovery ahead of Skift Forum Europe.
(Answers have been lightly edited for clarity.)
Skift: Accor has its roots in France and is a leader in Europe where we currently see an unpredictable and terrible conflict in Ukraine. How is the company responding?
Bazin: As I always say, our only concern is the safety and wellbeing of our talent, guests, and partners. Today, we do what we do best. We think from our heart. We take care of others. This is in our DNA.
Accor has activated its ALL Heartist Fund to support our teams and their families. In addition, our endowment fund Accor Heartist Solidarity is partnering with the UN Refugee Agency to collect employees’ donations, which the Group tops up. And of course, our teams and partners in close collaboration with authorities and [non-governmental organizations] also work to support those fleeing the Ukraine, offering accommodation and resources in neighbouring countries. In times of turmoil, thanks to our teams on the ground and our owners, Accor continues to play a key role, and hotels remain shelters.
Skift: Europe was seen as the laggard for a travel recovery while China and the U.S. led the way for much of the pandemic. But now Europe has been outperforming China off and on with hotel revenue numbers. How can Accor best position itself to accelerate its own recovery in coming months when most people anticipate record-setting demand on either side of the Atlantic?
Bazin: Accor is the leading international hospitality group outside of the U.S. and Greater China. We are present in 5,300 locations throughout more than 110 countries. During 2021, Accor opened 288 hotels, representing 41,000 rooms and resulting in a net growth in the network of 3 percent over the 12-month period. At the end of 2021, the Group’s hotel portfolio consisted of 777,714 rooms in 5,298 hotels, with a pipeline of 214,000 rooms coming from 1,218 hotels. Since April 2021, Accor has seen a sequential rebound in business, with [revenue per available room, the industry’s key performance metric] improving month after month and expected to continue increasing into 2022.
Indeed, the recovery is gaining momentum in Europe. Improvements in vaccination rates, introduction of the digital Covid certificate and easing of restrictions have contributed to a surge in European bookings above levels seen in 2020. Southern Europe is leading the way with domestic and European flows already exceeding 2019 levels. The meeting & event segment is also recovering, and Accor is backing this trend having put in place tools such as ALLConnect to facilitate seamless hybrid meetings.
Accor has all necessary capabilities to be at the frontline of the recovery and we expect intra-European travel to return to pre-Covid level this year. As the leader in European tourism, Accor has a wide and comprehensive brand portfolio from luxury to eco which we have continued to diversify through increased signing and opening numbers realized despite the pandemic. Recent and upcoming additions of iconic hotels to the portfolio include Sofitel Barcelona, Mama Shelter Lisboa, Mama Shelter Roma, Hoxton London, Mercure in Rhodes, Mondrian Shoreditch, and Fairmont Windsor.
As you may know, lifestyle will be one of the key growth drivers for us in the coming years. We’re leveraging the halo effect from our lifestyle brands to revamp our hotels under our core brands to welcome more leisure, business and local guests. A great example is the newly reopened SkyBar in Pullman Paris Montparnasse. Here guests can discover our creative F&B concepts and have a lofty experience at the highest open air rooftop bar in Paris.
In addition, we continue our digital transformation strategy to better meet customer expectations confirming and strengthening our competitive advantage in this. The creation of our Digital Factory was a bold move: More than 700 tech experts provide Accor with the capabilities to develop new features, apps, and tools in a matter of weeks, supporting our aim to improve the customer’s digital experience. After an intense review of our hotel portfolio with Travelsify, we’ve also launched a creative studio. This will enable us to form a better understanding of how our guests’ needs and tastes vary across hotels informing our own brand-new campaigns.
Skift: More U.S.-based companies like Hyatt are trying to push their way into Europe and expand, either through acquisitions or conversions or even new-build hotels. How does Accor defend its turf, so to speak, and maintain its geographic lead?
Bazin: 2021 was an encouraging year in terms of development. Having a [European] market share of 25 percent, Accor is the largest hotelier Group outside the USA in both revenue as well as openings and signings. We’ve also reinforced our leading position in signings throughout Europe, South America, the Pacific, and Middle East. We’ve achieved dynamic development in Europe where we have always been number one: the European market represented a third of global openings and signings in 2021, especially in Northern Europe that saw exceptional growth with 65 hotels and over 9,200 rooms opening in 2021, an increase of 39 percent compared to 2019.
Our core model is based on building long-term relationships — rooted in trust, transparency, and cooperation — with our hotel owning partners. Accor offers them professional expertise to boost hotel sales, increase average room rates and generate additional incremental revenue. With 60 percent of the Group’s development activity coming from existing partners, this plan is clearly working and being embraced by hotel owning partners, investment groups, and developers. Also, we have eight dedicated geographical hubs, experienced brand teams and local experts to support owners of new hotel projects — as well as hotel owners converting to an Accor brand — through every step, from integrating brand standards to marketing the hotel/franchise, year after year.
Skift: Accor and Ennismore are a major part of the lifestyle hotel discussion and developments seen during the pandemic. Is this your primary growth opportunity in Europe and other parts of the world moving forward? Do you focus on growing this umbrella of brands organically or are there further tuck-in acquisitions to beef up your presence in this sector?
Bazin: Lifestyle is one of the fastest growing segments of the global hospitality industry and Accor is a global leader in lifestyle experiences with recognized expertise in the F&B sector. Last year, we created a new entity named “Ennismore”, which now is the world’s leading lifestyle operator with a new level ambition: 13 world class brands, 73 hotels in operation, and more than 150 destination restaurants and bars. Our brands such as TRIBE, SLS, SO/, and JO&JOE will grow aggressively over the coming years and allow us to connect with customers, whether they are from local communities or guests further afield.
Lifestyle brands are becoming a growth lever which will represent over 25 percent of our pipeline fees almost certainly being our primary growth opportunity in Europe. However, we have also noted the growing pull of lifestyle hotels outside of Europe which are gaining traction on other continents. There, these brands provide a new value proposition with a more experiential offer and are destinations in their own right that will allow us to focus on organic growth.
In the post-Covid world, people are becoming aware of the importance of wellbeing and calling for changes to make the world more authentic and more sustainable. Lifestyle is the best response to these needs. It responds to people’s desire to socialize and enjoy leisure time, seeking different and authentic experiences, and engagement with brands close to home that offer a distinct personality.
[ad_2]
Source link