It has been a busy week for Accor — introducing a comprehensive new digital strategy in addition to acquiring a stake in an up-and-coming boutique brand in Mama Shelter — all as the company continues to evolve under its HotelServices/HotelInvest business model, which has now been in place for almost a year.
HOTELS spoke with Accor Chairman and CEO Sébastien Bazin about all of these big moves as well as the company’s overall market position.
HOTELS: The newly announced digital strategy obviously is multi-faceted, but what stands out to you as most significant about it?
Sébastien Bazin: [One important element is] when you feel you have plan, make sure you have all the human resources and financial resources to execute the plan. It’s also important to make sure you are working on a five-year timeline and not on a 12-month horizon, because 12 months will not do anything.
What’s unique is recognizing all the newcomers on the web have been customer-minded, whereas most of our industry has been product- and brand-minded. My view is, if you want to be following the customer, you have to be there either directly or indirectly in each step of the journey.
HOTELS: What significance is there in the timing of the rollout of this new digital strategy?
Bazin: I think it’s a matter of a few things. Number one is mobile technology is absolutely everything. The customer has global information in hand in real time, so they have a massive amount of data about what they want.
Number two, we all realize that for the last two to three years data and analytics make a huge difference in trying to predict the customer’s expectations and behaviors. We need to go very deep into accumulating data, extracting what we need from that data and making the proper decision off that data.
Third, which is probably as key as the first two, is that it is no coincidence that for the last 12 years all the web newcomers have been either innovators or aggregators. There is a new set of newcomers, which we call the disruptors — those who basically want to break the code and the rules, the Ubers, the Airbnbs of the world. Watch out, because those guys will change a lot of our own business model. Am I fearful? Of course not. I still believe we can partner with all the new web players, and we will, but it is a very strong wake-up call where timing is of the essence.
One additional element, which I think was a wise decision, is we decided why not communicate about it and be transparent? Because it is one of the key initiatives that requires investment, so you have to tell your investors, and you have to use it as a booster of pride and momentum for your employees. We shouldn’t be hiding anything from them.
HOTELS: How does this new digital strategy relate to the HotelServices/HotelInvest business model?
Bazin: It’s really embedded. All this new digital strategy is within HotelServices, but the benefit of this of new digital plan actually will be in HotelInvest because it will help them preserve margin and enhance the top line.
We have to continue the transformation to HotelServices and HotelInvest, because it is a two- to three-year journey. We cannot wait for the transformation to be over to start this digital plan.
HOTELS: What was the rationale behind acquiring a stake in Mama Shelter? What can you share regarding plans for that brand and how it will enhance Accor’s overall position?
Bazin: It’s a brand I’ve known as a guest for a number of years. They were looking to expand internationally and grow in terms of locations. I was absolutely convinced that brand has some initiative about it — it really provides a lot of different services and experiences to a very young crowd, below 45 years old. And that population going to Mama Shelter is coming from many different origins both in terms of culture and wealth because it’s affordable and it’s fun. What’s also interesting is they’re extremely efficient when it comes to food and beverage, which is 65% of the revenue base of Mama Shelter.
Accor will be providing them a distribution channel, muscles in terms of international expansion. Within the industry at large, you have a lot of new-concept, boutique, trendy hotels done by a new generation of independent owner-operators because they provide something with fresh eyes, fresh blood. Having our sales connecting with them is a major plus.
The one proviso, though — which is why it’s just a 35% stake — is to make sure they remain autonomous. The minute we’re integrating too much into their system, we may defeat these fresh eyes that they have, which is part of their success.
HOTELS: How would you assess the current state of the European marketplace, and what impact does that have on Accor’s plans?
Bazin: It’s a very different market in different areas. The U.K. market is absolutely booming when it comes to lodging and leisure. It has been pretty robust — but not booming — in Central Europe and Germany, and it has been pretty mediocre and complex in France and Southern Europe.
Accor has the great liberty to be extremely diversified in Europe because we’re present in all those different jurisdictions, so we can sustain any storms and take advantage of the environment. HotelInvest is indeed an investor in Europe, because that is a mandate, but when it comes to new management contracts, 70% of Accor’s expansion today is in Asia Pacific, in Latin America and in the Middle East and Africa. That’s where we’re expanding faster with a true commitment to diversify away from Europe.