Interview with Jean-Jacques Morin, Deputy CEO and CFO at Accor. A discussion with Vanguélis Panayotis, CEO MKG Consulting.
We have just come out of this pandemic crisis. Could you tell us about Accor's current situation?
Jean-Jacques Morin : I would say we have reached an inflexion point. We have more wind at our backs than in front of us, and we have really gone through a turbulent zone, I should say.
I also think that this inflexion will be heterogeneous.
You just launched something called SPAC, could you explain what it is?
Jean-Jacques Morin : SPAC stands for "Special Purpose Acquisition Corporation".
What is a SPAC? It is an entity set up by investors who put money into it and charge a fee to help them decide what to invest in with the money they set aside.
What we are doing with SPAC is we are continuing to develop hospitality, which means we are looking at what is going to happen to our business, but we are not doing it with our balance sheet, we are doing it with the money that is put aside on SPAC.
A critical point in the SPAC is that it is a corporate SPAC. It is the first corporate SPAC to be done in Europe. In the SPAC world, the difficulty is that there is a lot of money, but because there is a lot of money, a lot of choices made were not necessarily the right ones, because when you have too much money, you make the wrong decisions.
In the case of SPAC, as it is sponsored by Accor, we will ensure quality. We know the market; we know what the targets are. We have made 12 billion in acquisitions and asset sales over the last five years.
Thus, thanks to this intimate knowledge and the ability to evaluate what we bring to the other is of quality.
Part of your operational scope you have the group’ strategy. You just mentioned about how innovative could be the SPAC, what is the dm's and the objectives for Accor?
Jean-Jacques Morin : SPAC and its link to Accor's strategy are very clear.
In fact, we have it for many years now, and we are sticking to this direction, to the enhanced hospitality path. SPAC is exactly in line with this increased hospitality path.
That's how SPAC fits in with what we're doing in the company.
What will be the benefit for your partners?
Jean-Jacques Morin : Partners benefit from the fact that as a manager, I can offer some of the toolbox to the brands of those asset owners, which I probably wouldn't have had the same access to if I hadn't been involved in some way in the acquisition and equity of that entity in the end.
For a small investment up front, I can provide a great brand to the asset owner and hopefully, through that great brand, drive more traffic to the hotel. The asset owner benefits, and I benefit as the property manager.
Everyone is asking what will be the coming in five years for our industry?
Jean-Jacques Morin : What we had before the crisis, which is a pursuit of experience and so-called experimental hospitality trends, I think you will see considerably more.
Because what has happened with this crisis is that people have saved money.
Just to talk about France, 200 billion euros were put aside last year on top of what people usually save. So, there is money here that was not spent and there is a kind of pent-up demand from people to enjoy life even more, because they have been deprived of it for a year and they know even better the price to pay for enjoying it, because they know what the price is for not enjoying it.
There's a shift today in the way people want to see their room in the office, all this stuff about working from home, working from anywhere. Things are going to level off, they have not leveled off yet, but there will be something that will remain from all of these chances, which is that people will not go to the office every day.
We have been thinking for a few years, through work hospitality and WOJO, that there is a game to be played there. So, we think that trend will continue to crystallize, and we have already made an offer to do that.
What happens with this crisis is that we are in the middle of it and there is a lot of emotion around it.
But if you step back and look at some of the crisis, people still look at them as blips, so it is a blip, which is very unfortunate.
It is a bleed that I hope will not happen every year, because I do not know if we can handle it.
This blip will still have the benefit of having accelerated some things.
I know your academic background is around aeronautical engineers, how did you get into the hospitality industry?
Jean-Jacques Morin : I'm really into products a lot as you know.
I worked in semiconductors, and I worked in high-speed rail construction so I'm really into products and testing things.
That is how I have built my background throughout my life. Digital Transformation which seemed like a great company and my engineering background kind of fit that and I thought I would try to do something different and that is how it happened.
There was no planning done around it.
Today I do not regret a minute of it.
What did you learn about yourself during this time?
Jean-Jacques Morin : The difficulty of being a manager is the lack of visibility. Anyone who thought they were forcing something was wrong the next few months. I think we went through so many different iterations that it really made everyone's life difficult.
I think what we learned or what we did well was that we had a set of strategies and a set of accesses that we had determined before and we did not fundamentally change them.
We stuck to what we determined to be the course. I will give you an example, we were discussing about what we were doing in terms of lifestyle, we could have totally stopped that initiative and said look, business is tough, we will wait, and we'll see.
We did not, and I think that staying the course also helped people to find a way forward. In the end, in these crises, what matters most to people is to see a path, a direction and the light at the end of the tunnel.
We are now past that point; it is much easier to make those comments.
Keeping your cool and your composure was difficult as a leader.
What I have learned about myself is that every time you think you have reached the limit, there is a new limit, and you reach the other limit.
We went through the crisis, and I am not talking about me, I'm talking about the whole management team and the teams in the company in general.
When you face the crisis, you know you act, and you think you have reached the limit, and you know that you have reached the limit because you tried before to do things that were beyond that limit, and you could not do it.
We launched the "Reset" plan.
"Reset" is super ambitious, it's a significant improvement in terms of the company's ability to generate capacity, to just qualify its 20% more on the 2019 base. Everyone said, "Oh my gosh, how are we going to do that?" And then people worked, they worked for a long time, they used the right methodology, and in the end, they were able to do it, and that's very important to survive. It's also very important to be more agile when you come out of the crisis and be able to rebuild faster. What I learned is that when you think you've reached your limits, you can work and do better.