The panel was headed up by Vanguelis Panayotis, CEO of MKG Consulting, as part of the conference marking forty years of the leading European hospitality postgraduate management programme. He was joined on stage at Pullman Paris Centre – Bercy by Gabriel Matar, Managing Partner at Sentinel Hospitality; Françoise Houdebine, CMO of Louvre Hotels Group; Camil Yazbeck, Global Chief Development Officer at Accor; and Carine Bonnejean, Managing Director Hotels at Christie & Co.
Three of the panel were IMHI alumni, as such Vanguelis Panayotis started off the panel by asking Camil Yazbeck to summarise his career in hospitality thus far and how IMHI helped him achieve it. “IMHI has been an inspiration for me. The key thing I remember from it is that way [it] always made you think and had you looking to make the impossible possible”.
The first topic of discussion was the role of software in the industry nowadays. Vanguelis Panayotis evoked the increase in competitivity in the market due to the last 20+ years in which software has been used in order to develop supply. He asked Camil Yazback how Accor try to gain a competitive edge in this field.
Accor’s Global Chief Development Officer cited three ways in which the group achieves this. Firstly, it ensures growth by finding the right owners via deals structured around what a potential owner might want. Secondly, it exploits its 360° offer afforded it by the group’s large brand portfolio. This includes hotel brands, extended stay offers, F&B concepts, coworking, etc. Thirdly, Accor focusses on ESG and brings a toolbox of expertise and knowledge into how to implement these practices in properties.
On the question of the challenges of marketing economy brands, Françoise Houdebine discussed what Louvre Hotels Group learned during the Covid-19 pandemic. “Managing brands during difficult times is a real opportunity and pushes creativity and innovation”, she shared with the panel. During the pandemic, the group was able to create new brands for the long-stay segment, as well as work on other new offers.
Furthermore, she talked about how new customer behaviours emerge during difficult times and the importance of being aware of and responsive to these evolutions. She gave the example of integrated sports facilities in a property, which became an important criterion for clients during Covid. Naturally, economy brands are weaker on this offer than other more premium categories, however Françoise Houdebine stressed the need to “keep bringing content to the experience, regardless of segment”.
Vanguelis Panayotis then turned the mic over to Carine Bonnejean of Christie & Co. for her thoughts on the current trends of deal flow in the hospitality industry. For her, there is currently a “massive disconnect” between what sellers and buyers are keen to agree on in terms of pricing. Until one of the two parties decides to shift position, it is likely that all players will continue to find themselves in “a bit of a limbo situation”.
Next, Gabriel Matar of Sentinel Hospitality spoke about asset management. He discussed how, outside the big players, it remains “young” in the French market. Sentinel does not act as a broker but works alongside all the brokers operating on the market. Many of the clients that come to see the company for advice on asset management are looking for solutions as regards the passing of assets between generations. Finally, he shared a 5% difference in prices between now and 2019, which he qualified as already having been “a good investment year”.
The panel moved on to the subject of yield compression with Camil Yazbeck discussing the situation at a macro level, as well as what Accor are doing in terms of business. According to him, the market is very slow from a transaction perspective, especially in westernised economies. Both investors and banks are afraid of taking a commitment, which he regrets as there is a lot of money out there, but nobody is finding the right opportunity to buy at a discounted price.
Yazbeck highlighted Southeast Asia as being a zone that is performing well. Due to Accor’s asset-light strategy, it has been able to work recently with different owners compared to the past and now enjoys a very global pipeline. Outside of the US, the group currently signs 30% of the market share, meaning three in ten deals are signed by Accor. Finally, he underlined the draw hotels continue to have for investors as they bring much better returns than other types of real estate.
Addressing the acceleration the sector is enjoying in the post-Covid recovery, Louvre Hotels Group’s Chief Marketing Officer praised the entrepreneurial spirit she is now seeing in hospitality. Françoise Houdebine explained that prior to Covid, the group did not do business deals. Now, as more and more hoteliers want to manage their own hotel – as their own hotel – LHG launched its own business model during the pandemic.
This allowed Vanguelis Panayotis to segue the discussion into the role of ESG in the hospitality sector going forward. He stated his belief that “we have to turn ESG into something very concrete that we can create value from”, before giving the floor to Gabriel Matar.
The Managing Partner at Sentinel Hospitality immediately highlighted the upcoming Paris Olympic Games in 2024 as a major opportunity to strengthen ESG. He qualified this by sharing his conviction that after the Games, any asset that is not carbon efficient will have to prepare itself for a discounted cash flow that could also then be disrupted by the legal obligations engendered by the décret tertiaire set for 2030 regarding energy efficiency in buildings.
Françoise Houdebine and Camil Yazbeck were firm in their belief of the great importance of ESG in the industry. At Louvre Hotels Group, over the last two or three years, they have noticed “big changes in investors’ needs” in terms of refurbishment works. Before, they primarily assisted investors with design or operational efficiency issues, etc. Now, the first question the group gets when starting renovation work is: “what is your advice as regards our ESG requirements?”.
“The short answer to ESG is there’s no choice. The owners have no choice at all”, explained Yazbeck. Furthermore, in his opinion, customers will stop coming if a property is not transparently ESG-friendly and not being so will also have an impact on a hotel’s dealings with online booking engines. For Accor’s Global Chief Development Office, the next two/three years are all about conversions and green transition practices must be integrated into the sites during these renovation works.
To conclude the panel, Vanguelis Panayotis asked the other participants also to share their thoughts on the future of the industry or any forward-looking advice they would like to give.
Carine Bonnejean shared the harsh realities of life in business and that many hotels are in a difficult position. The potential upside of this is that this precarity could create opportunities for investors to acquire assets at a discount. In her opinion, this tipping point which will result in many properties being put up for sale could arrive (very) soon.
For Gabriel Matar, the principal piece of advice he would give is to anticipate, and not get caught on the back foot when the time to act becomes primordial. “It is much better to do the work now than to be caught up in the rush when the market becomes saturated with people who are afraid and making rushed decisions”.
Finally, Françoise Houdebine told the conference always to be curious. She invited her fellow hospitality industry actors never to give up and continue to innovate as that is what leads the sector forward. “Innovations, even small ones, always create value.”
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