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[Exclusive data – 25 years of Hospitality ON] AccorHotels: The Transcontinental Goose

When Paul Dubrule and Gérard Pélisson opened the first Novotel in Lille in 1968, did they imagine that their new company - SIEH - would one day become the European leader in the hotel industry? Motel 6, ibis Megabrand, Colony Capital... between innovation and risk-taking, AccorHotels' history has been turbulent over the past twenty years.

Over the last 25 years Hospitality ON has borne witness to the evolution of hotel groups. In celebration of this quarter century, we offer a look at their history through the data we have collected.

From the very first years, the group's flagship brands were either created or acquired: ibis was launched in 1974, Mercure was acquired in 1975 and Sofitel in 1980. In 1985, SIEH became Accor and inaugurated Formule 1. Five years later, it took over the American brand Motel 6 and became one of the largest hotel groups in the world.

1998: "Accor 2000" project

The Group is taking action to reform its internal organization in order to improve its efficiency. The balance of its finances and the reorganization of its structures are on the agenda.

The "Accor 2000" project - named by Jean-Marc Espalioux - took shape and the share price doubled in 1997. Financial experts were very positive about its evolution on the stock market and some predicted a share value of nearly 2,400 French Francs in the following months.

This momentum came to an abrupt halt in August 1998, a catastrophic month for the CAC40: the Russian financial crisis, the brutal collapse of the American economy and the failed induction of the Japanese Prime Minister destabilized stock markets around the world. On Friday, August 21, the CAC 40 lost 3.18% and the Dax lost nearly 6%.

 

Evolution du cours bourse Accor entre 1 janvier 1995 et 1 janvier 1999
Changes in Accor's share price between January 1, 1995 and January 1, 1999

 

2003: Organic development strategy

In 2003, Accor did not make the first headlines due to takeovers, as had been the case previously with : Rema and Dorint in Germany, Orbis in Poland and Libertel in France. The growth of its customer base was the result of an organic development strategy for its brands.

Jean-Marc Espalioux, Chairman of the Management Board of the Accor Group, commented: "In Europe, we have more than confirmed our first place with the consolidation of our privileged position in France and Germany. We continued to grow in the United Kingdom, Spain and Italy, as well as in Central Europe, where we were able to take a leading position based on the strong presence acquired in Poland and Hungary. In North America, our reputation is growing and our positions are solid. In the rest of the world, our progress is rapid and continuous, whether in South America (from Brazil), Africa or Asia-Pacific.”

2004: Accor meets Colony Capital

With the goal of reaching 550,000 rooms by 2008 and 5,000 hotels by 2010, the French group partners with Colony Capital. The American fund provides €1 billion to the French group to achieve, over three years, what was initially set to be accomplished in five years.

In addition, the implementation of a new bedding concept is in the spotlight at Accor, which, with the "My Bed" concept, now offers Sofitel customers a feather bed.

Sofitel My Bed équipera en 2018 la classe affaires de Hainan Airlines
Sofitel My Bed will equip Hainan Airlines' business class in 2018

2008: Priority given to Motel 6

Four years later, Accor recorded a significant decrease in its supply (-5.6%) due to a new brand strategy. The group decided to focus on developing its American economy brand Motel 6, a brand whose reputation as the "national chain offering the lowest prices" was well established after 30 years of existence.

As a result, the French group separated from Red Roof Inns, which operated 326 units and 35,238 rooms for more than €800 million, thanks to the consortium of Global Special Situations Group and Westbridge Hospitality Fund. In addition, some forty Dorint hotels were sold and returned to the German group.

That same year, Accor launched two new brands (Pullman and All Seasons), repositioned Sofitel in the luxury segment and decided to revitalize Formule 1, now HotelF1.

Motel 6 Las Vegas
Motel 6 Las Vegas

2012: Refocusing of the group after a heavy accounting loss

2012 was the year of refocusing for Accor through marketing centering on the brand ibis and geographic focussing with the sale of the Motel 6 chain in the United States. The supply suffered from this situation with a loss of more than 80,000 rooms that brought it back to a volume comparable to that of 2004.

By ending the Motel 6 adventure through the sale of the brand to Blackstone, Accor eliminated a thorn from its side, at the cost of a heavy accounting loss of some 600 million euros.

That same year, the emphasis was put on the realizing the ibis Megabrand project to regroup ibis, ibis Styles (ex-All Seasons) and ibis Budget (ex-EtapHotel) with a powerful communications campaign and strong growth for the brand (12 % increase capacity).

Nouveau site internet de Ibis en mai 2012
New ibis website in May 2012

On a like-for-like basis, sales improved and so did the group's profitability. Development accelerated at a rate of 40,000 new rooms per year, with priority given to emerging countries in Asia and Latin America. Novotel opened its 100th property in Asia Pacific and ibis signed its 1,000th location.

Despite its good performance, the group is under pressure from its shareholders who want to accelerate the pace of disposals and the distribution of special dividends. Denis Hennequin, the CEO appointed in 2010,  lost his position at the beginning of 2013. He was replaced by Sébastien Bazin, the member of the Board of Directors on behalf of Colony Capital.

The latter took over the operational management of the group during the summer, replacing the Denis Hennequin and Yann Caillère tandem, with an aim to clearly separate the real estate business from the management and franchising entities.

2015: AccorHotels invests in digital

Sébastien Bazin made digital reconquest a priority objective (225 M€) in order to boost direct sales and a change of identity. As a result, Accor became AccorHotels, with the same name as its reservation center, symbolizing the chosen strategy.

Evolution du logo Accor
Evolution of the Accor logo

2016 : Acquisitions of luxury brands

Growth requires acquisitions, particularly that of Fairmont Raffles, to consolidate the luxury division and, as a result, bring in new shareholders: Prince Al-Waleed's Qatar Fund and KHI. The performance of HotelInvest and HotelServices is now more readable with a constant improvement in gross profit, in excess of 650 million euros.

2017: "Booster" strategy

In 2017, performance improved significantly, producing good operating results and record growth: 44% of its projects for openings were concentrated in Asia-Pacific. In addition, the French group expanded in emerging countries such as Brazil with the signing of an agreement with BHG for 26 hotels (4,400 rooms).

Together, the implementation of a strategic partnership with Rixos Hotels in the Resort segment, the acquisition of the Australian Mantra Group, the recent acquisition of Mövenpick Hotels & Resorts and the recovery plan for the budget brand hotelF1 further accelerate the momentum of the consolidation of its hotel portfolio.

Projet du premier hôtel Orient Express
Project of the first Orient Express hotel

Its Booster strategy, which is based on the growth of its new businesses with the acquisitions of Potel & Chabot, Noctis, VeryChic, Gekko, Availpro, Nextdoor and Orient Express, plus its development in China through partnerships with Huazhu, Jin Jiang and Ctrip, as well as its solid financial structure, strengthened by its new 57.8% subsidiary HotelInvest, enabled it to generate between €4 and €5 billion in cash and create an asset value of €7.6 billion.

AccorHotels aims to become "the new travel companion for customers". Has its goal to improve its relationship with its hotel partners and customers through cultural and technological transformation been achieved? We’ll report back in the coming months.

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