By Paul Dubrule, co-founder of Accor Group, during the MasterClass 2019 of the 20th Worldwide Hospitality Awards.
They say that in business, you have to know how to dream. Not small dreams, because they do not go far, we must have big dreams. I had the great dream of wanting to build a hundred hotels, like Holiday Inn. But I didn't have any money, and I didn't have a model. So I went to the distribution people, etc., and there wasn't one of them saying he was developing. That's when I met Gérard Pellisson. But we still couldn't afford it, we still couldn't get started.
So I borrowed money, I took a plane ticket to Memphis, to see Kennas Switson, and said to him, "Mr. President, I would like you to hire me as your Vice President Europe to develop Holiday Inn, because right now I see that you are having trouble, but I know exactly what you need to do." So he tells me that it's interesting, but that he has to see his partner, and promises to give me the answer in a week. While waiting a week, I tried to see a few others, to sell myself, to Sheraton, and others... but I couldn't sell myself. Then after a week, the president of Holiday Inn told me: "The answer is no." I've never been so depressed as I was that day. Confused, I had prepared a beautiful presentation... but you see, that's how you get lucky in life. You have to start with a big slap in the face, and then you can move on. Anything that doesn't kill you, makes you stronger. But an idea is worthless until it has been realized. An idea is only valuable once it has been implemented.
Also, Gérard Pellisson and I were complementary. He had a much better financial sense than I, and I perhaps had a much more strategic sense. It was not always easy. It's like marriage. All married people know this: not every day is necessarily easy, but that's not why you have to divorce, even if there is sometimes temptation.
The first Novotel was, in my mind, a slightly lower category, than ibis. I really wanted to do budget hotels that were reproducible, and the objective was to do 100. The pressure of hotel credit, which was the only means of external financing at the time, was such that they did not want a wholly economy hotel business. Novotel was a mid-term solution that succeeded in getting through. But I was dreaming of this economic category. My project was to have a hundred hotels. But Gérard and I quickly realized that we would reach 100 hotels in France quite quickly, even if it was more like 80-90, but it was clear we could get there. We then said to ourselves: either we go international or we create this ibis product. Sometimes it's hard to choose, so we did both.
So, ibis was a great success, and international development a disaster. For a very long time, international development began with Switzerland and Belgium, which was a real disaster. Our accounts were then deteriorated by the losses we were making in these two countries. After that, we went to Germany, to England, always with the determination to succeed, which was a burden: I think we lost money for 15 years in England, for 10 years in Germany, for 15 years in Switzerland, yet today these countries are the biggest contributors. We say "perseverare diabolicum", perhaps, but in this case, we were a little constrained. Our board of directors told us: "Stop! Cut off your finger, your arm, but stop it!". So we would say: "Yes, but how?". We must continue. And this is when luck struck: we became the world's leading international operator. Because most of the big companies are in their countries. Americans, even if they are strong internationally, are overwhelmingly in their own country. The Chinese, same thing. Only the little French ones remain.
For the name Accor, we did some research with specialists, who gave us mythological names, flowers, plants, great men,... and then there were two more: Aurore and Accor. I was personally against Aurore, because in English it sounded a little horrible. Accor comes first, it started with an "A"... But in the end, names don't matter much. It's what we do with it that matters. Look at companies that developed after the war and called themselves Bosh, and that are doing very well... or you come up with unpronounceable names, like Häagen-Dazs ice cream, but that's okay. So the name doesn't really matter, rather it's what we're going to do with it.
But there are important elements, such as industrialization, which may have disadvantages today, but which made it possible to reduce prices at that time. The second important element is the very early realization that we were in a labour profession, and that the labour force, if it was trained, if it had skills, if it could be educated, could perform extraordinarily. It is true that for productivity in our professions, there may be robots, artificial intelligence... we are still limited. But where we can make tremendous progress is when we train and educate our staff, thereby motivating staff, because staff are key in this matter. Moreover, I would like to see minimum wages increased today. You can increase salaries today in the hotel business by 20%, I am sure the result will be positive.
We can discuss it, although we tremble when we talk about things like that, and it's not easy. It's not easy to do, because you're not alone, you have neighboring competitors, a number of things... but if you don't all do it, what difference does it make? That's the problem. An agreement with the public authorities, the social partners and all the hotel industry would be a very interesting challenge. We need to increase salaries in our profession. As for industrialization, it is not dead. Just because we stick pretty decorations on hotels, and put bouquets of flowers around, doesn't mean we do lifestyle... I don't mind, but we have to think with the automotive industry. You have brands, like Audi, Volkswagen... but they have a common platform: technologically, the platform is there. Then it gets decorated, receives different bodywork, details are added on top of that... but that's all decorative. The technology to make the air conditioning work, to make the heating work, to make the materials solid, or not solid if you want to replace them regularly, must be worked on. Technology, the industrialization of platforms in the hotel industry, is essential.
Today, Accor's problems are beyond me. I went back to hotel design. There are two things about creating hotels: both the brands and what you want to do with them. If you are a young entrepreneur, you have some money, and you can finance your own hotels, if you don't plan to be listed on the stock exchange and have walls and funds, I'm convinced you can do it. But if you want to be at the level of Accor, you can't, you can't anymore. So you have to specialize in service provision, and find the right agreements, with Booking.com and others, it's absolutely essential, it's an important step. Because there has been an evolution. So if you're alone, build your hotels, develop, and take a brand. Brand owners must be careful: as Gérard Brémond said, you shouldn't confuse a chain with a brand. I think that brands must be strengthened and consolidated. In the business, there are OTAs and brands. But one will not replace the other, because we will always need a quality reference. So you have to invest in the brand.
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