By Denys Sappey, Chief Operating Officer - Owners Strategic Relationships Europe – Accor at the Paris Asset Forum >hospitality.
An omnichannel strategy
Our strategy is to be a host consistent with our brand’s common values around the world. In a hotel people work. Accor has launched a co-working concept. People have fun, dinner and lunch there. People meet, celebrate, so we have also developed recreational activities.
With regard to our investors and owners, we must make hotels increasingly profitable and utilize our leverage to accelerate hotel profitability.
All these elements are grouped together in a customer loyalty ecosystem that is global and on which we stake a lot of ambition for growth.
We have on one hand the brands (13 brands a little more than 5 years ago, 39 brands today). These brands can be found in all segments: luxury, midscale and economy and lifestyle is also present among all these segments. There are also additional activities that complement the hotel offer, like co-working with the brand Wojo, in which we are equal partners with Bouygues Immobilier and Mama Works at Mama Shelter.
The playful side lies in the catering activities of Potel & Chabot, or Paris Society, which operates several restaurants in the major capitals, as well as the catering brand sbe, the lifestyle brand we recently acquired.
There are also the business acceleration levers that will affect both the distribution of our hotels and the ability to make them more visible and to organize marketing to customers. At Accor, we are clearly in an omnichannel strategy. You always have to have a prism through which you have the ability to visualize traffic acquisition on your sites, which we do through a number of operators.
The customer experience is found through touchpoints, the portal that we offer to our customers, to be able to intervene at any time from booking to the next stay.
We have critical mass at the global level that allows us to do our purchasing at considerable volume. Accor buys more than €3 billion worth of consumables, which allows us to operate our own purchasing platform.
When a partner signs with Accor, we can offer them all this. What is important is, when you choose a hotel, you also choose a brand to operate it. The fact that we have gone from 13 brands to 39 reflects a very strong development strategy. This makes it possible to accelerate development opportunities and find as many partners as suitable solutions through this very broad segmentation.
When you choose an investment, you choose a brand, the best positioned in a given market environment. And, in this market environment, to operate it requires extremely powerful distribution and marketing resources.
A Commercial Strategy
This strategy is based on 5 axes in which a lot of resources are put. First, for digital, critical mass is very important when buying keywords on Google. For example, when one buys these keywords for 30 hotels it is much more profitable than for a single hotel. Second is being able to generate extremely professional touchpoints at all times of day and night in the customer experience. Third, the global network of sales teams is also important, particularly for major accounts. Fourth, revenue management is one of the essential growth drivers. The group positions itself as a premium provider of solutions for hotels operated under franchise agreements by providing tools, methods, and teams. Finally, loyalty: the power of systems that allow you to interact with the customer every day. This is the ambition of a program that will now be called ALL.
The European Market
A market "blessed by the gods" because, above all, it is the world's leading hotel market. It continues to develop significantly. Growth in demand of 2.4% is higher than that of available supply, which is up by 1.1%. All this helps to ensure that ORs continue to grow.
It is a market that represents 2.7 billion overnight stays and is operated by both established hotel groups and disruptors, by giants in the sector such as Priceline and Airbnb, which also contributes to the growth of accommodations.
The market is also growing in terms of international passenger volume, which is currently expanding at a rate of 6% per year. For several decades, the market grew by an average of 3 to 3.5% per year.
In the European market, 147,000 hotels are present. Among these properties, only 18,500 are operated under hotel brands, which leaves considerable growth potential. This means that nearly 38% of the number of hotel rooms in Europe are operated under a brand name, which is two points below the global average. This development potential exists in particular among independent hotels that are particularly present in the Southern European markets.
Accor has been number one in Europe for many years. This market represents 47% of our “weight” in the world. As Europe has developed, so have other regions around the world. This growth represents 3,000 hotels, 340,000 rooms and a new property opens every 3 days. Of the 39 brands we have, 25 are currently operating in Europe. Five years ago there were only 12. This evolution reflects a real interest in the group's brands, particularly lifestyle, luxury and premium brands, which play an important strategic role.
Today, Europe represents 700 partners who are investors and owners, who entrust us with the management of their hotels. Of these, 65% have only one hotel. The ones that are growing the most are timeshare owners, the biggest being, of course AccorInvest, with more than 850 hotels.
We can see that we have extremely strong profiles and ambitions for development among our owners. The objective is to ensure that they develop, with us first and foremost.
Hotels Are Living Spaces
We are renovating our hotel living spaces. We measure very precisely the impact on the RPS, the evolution of RevPAR and the results as these elements are extremely related. There have been emblematic renovations, such as Hotel Pullman Bercy. New concepts such as Wojo, a co-working concept for which we have great ambitions for development, and F&B which is an essential touchpoint.
In short, standard concepts, tailor-made concepts and concepts that can be adapted to the different hotel segments.
Brands are like hotels, because they become obsolete. They are then given a new personality, renovated and rethought. This was the case with Ibis recently. We are also innovating by offering very different forms of accommodation. Mobile hosting, for example, through Flying Nest, gives us the ability to operate hosting for events. The greet brand, which is less than a year old, has aims to occupy the super economy lifestyle segment.
When an owner signs with us, we have commitments. Of course, our ambition is to give added value to OR, to the RevPAR with our brands and distribution portals. We ensure that hotels have the highest visibility everywhere. This involves 150 e-commerce experts who are there to ensure visibility on our e-commerce sites, to acquire traffic and to retain customers. Sales teams whose efficiency is measured every day through global contracts. Another commitment, therefore, is to generate revenue.
When we operate under management contract, we must also be able to bring profitability. Once the contract is signed, the expertise of a group like Accor does not stop there. Its ambition is to benefit as many partners as possible. This involves, in particular, traditional offers that go beyond a franchise and management agreement and make it possible, depending on the diagnosis that will be made in each of the hotels, to provide solutions over time. These solutions will boost the hotel's activity, make it more visible, improve its profitability, and measure the impact of certain measures against this result. This is our business as an operator: to bring performance to hotels beyond the growth that the market can mechanically develop. All this is done in an approach that preserves the values of the group, such as sustainable development, which is a very strong policy.
The teams of developers are extremely dense in Europe. Once the contract is signed, it passes into the hands of the operational staff, each team being specialized in either franchise agreements or management agreements. The group puts a lot of emphasis on training these teams so that they are able to provide what the owners expect. We work with them to create 3, 4 and 5-year plans to implement the group's strategy in the institutions. We also measure customer satisfaction and create action plans, if necessary, to improve the performance of the properties.
We are in partner-to-partner relationships, and this is how we intend to develop the profitability and activity of hotels and the network.
Managing a relationship is about providing information, performance information that is deployed through a digital tool, which provides information on KPIs, visit reports by operational teams, solutions that can be proposed, and the evolution of our brands.
In conclusion, this profession remains above all a human profession. We never forget that in our relationships. In both the relationships we weave with our investors, and also in developing the talent of our teams in hotels.
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