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[#PAFh19] “Accor Group could not afford not to be in such a strong development axis."

Speech by Cédric Gobilliard, Senior Vice President Lifestyle Division, Accor at the Paris Asset Forum >hospitality

Why lifestyle at Accor?

At Accor, we created a lifestyle division 3 years ago because customers came us saying: "We want to consume hotels in a different way." And: "We want to experience something different from the classic hotel business." Second trigger: Airbnb with its positioning of "You will live differently, have a different experience with the locals."
More and more customers want to experience places to live, to experience the local culture.

If we focus on global trends, lifestyle is still marginal in the hotel world. Only 2% of the volume of rooms in the world are lifestyle rooms. This volume is expected to double in the next 3 years. Everyone wants to enter this trend and have a destination logic. The Accor group could not afford not to be in such a strong growth axis. It is undoubtedly a lever for the group's growth.
 

A lifestyle hotel, what is it?

A lifestyle accommodation is above all a destination. Guests come to your hotel because it is a place to live. Your first target must therefore be the locals. Working on F&B, entertainment, creating an attractive place for locals where there is atmosphere, a place that is "the place to be" at the destination, helps attract travelers. Intellectually, we are therefore thinking about the opposite of a hotel property. It is certainly a hotel, but it is first and foremost a place to live, a restaurant, a place of entertainment. The common area is therefore more important than the bedrooms. We must overinvest in common spaces.

When you go to Mama Shelter, Jo&Joe, 25Hours, Delano in Miami... you go there because the design and environment of the common areas are interesting and the locals also go there for that. The common spaces must therefore be authentic, stylish and spacious. This is very interesting from a point of view of optimizing the yield of the m². These common areas, reception for example, do not create value in the traditional hotel business, but here they do because it is F&B and entertainment.

Lifestyle accommodation clientele refers to a population that likes to travel and go to places that are “musts”. In NYC it’s the Standard, in Sidney it’s the QT Hotel because it has the best mixologists, and all hit his will be posted on Instagram. The point it to be able to say "I was there". It is therefore necessary to create "instagrammable" and iconic places. In all the hotels developed by the group, there is an iconic spot. For example, the roof top of the Mama Shelter Los Angeles ranked among the top three American roof tops. Investment has been a very high, although it is very small, turnover is very high on this site on a daily basis.

Another important element is F&B. We systematically sign with chefs because F&B is essential, especially for us who are from a Latin culture. Conviviality and experience are also about a good meal. In our company, catering is not limited to F&B; it becomes F&B&E for Entertainment. The experience is not only in the plate, it is also around the plate. The atmosphere is therefore essential. All Accor lifestyle brands work with chefs. Mama Shelter works with Guy Savoy, 25 Hours works with the Israeli business Neni, Dani García for the United States, etc.... You need a significant F&B expertise for these brands.

At 25 Hours, Mama Shelter, Jo&Joe and particularly for sbe: more than 55% of the turnover is generated in F&B. The ratios in the traditional hotel business are 70% accommodation margin and 30% F&B margin. Optimizing F&B automatically generates value.

Entertainment is also central, at the first Jo&Joe that opened in Hossegor, 70% of the turnover comes from entertainment. There is an event every night. At Mama Shelter there is entertainment from Wednesday to Sunday. At 25 Hours as well. For us hoteliers it was a revolution. Having an artistic director and explaining this need to the owners is delicate and yet it is what creates value. It is the artistic director who will negotiate with tourneurs, to organize shows, entertainers and musicians. When there is a concert or show, it increases F&B sales by 25%.
Locals come to these establishments because they know that there is something going on every day.

Recruitment

In lifestyle we do not hire staff who have received formal hotel training. What interests us is the knowing how to be, interpersonal skills. So we look for particular personalities, that are extraordinary in relations. It is necessary to develop a relationship based on the mantra "the guest is your friend". For example, a Mama Shelter employee who takes your order from you will not stand up but will crouch down to the same height as you.

This type of profile generates two challenges. First, there is a high turnover directly related to the type of profile recruited. Secondly, recruiting this type of profile requires a lot of training time. The bosses at Jo&Joe, 25 Hours and Mama Shelter personally recruit the department heads for all their properties. It remains to be seen how recruitment will proceed when the number of accommodations increases.

Lifestyle brands, what marketing?

When asked by a Brazilian owner "how much do you invest in the Mama Shelter brand", it was necessary to explain the differences in the way these establishments operate. There is no investment in the brand in terms of space but we overinvest in the brand locally. We want locals to be able to say "if you want to experience Paris, go to rue de Bagnolet". After 11 years of opening, Bagnolet's Mama Shelter still has 500 covers per day. Our marketing is therefore local marketing, which completely changes the logic we are accustomed to. Take brand awareness, for example. On lifestyle brands, 80% of investments are made on social media and on the local level.
There is over-investment in communities, Instagram, Snapchat and Facebook. There is a logic of values, for example at Mama Shelter in front of all the establishments there is a white flag to symbolize equality. These strong values, which are sometimes divisive, create community.

Optimisation of costs for the owner

Une marque forte génère un engagement fort de la part des clients donc une fidélité importante. Il y a toujours plus de 50% du CA généré par le F&B. La marge est plus faible sur ces produits mais l’optimisation au m² est plus importante. Sur ces produits, c’est par le nombre de couverts que l’on créée de la valeur.

Mama Shelter Belgrade

The property is now open with a shopping center on the ground floor. Customers first enter the shopping centre, which is located in the heart of the city on a pedestrian street. This catchment area allows the establishment to reach 2,000 covers per day (the average ticket being about 5€) there are always people there. The establishment also drains traffic to the shopping centre. All this works because the property is a destination, people want to go to the Mama Shelter in Belgrade. It has a roof top of about 1,000 m².

IKEA with Jo&Joe Vienna

IKEA is completely reinventing itself. IKEA stores are opening in city centers, for example with 30 projects in hyper center. They also have a need to generate trafic, create a destination. Jo&Joe will thus be located on top of the store in te center of Vienna. This is a very interesting project because they reach the local population this way, create traffic and reach travelers.

These two partnerships create value for stores and contribute a crucial element to the properties: prime location.

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