
Jean-Gabriel Pérès graduated with an MBA from ESSEC and began his career at the Lagardère group and EADS, which he left fairly quickly to join Le Méridien. At Le Méridien he was the Group’s Vice President Development for Africa and the Middle East and then Managing Director for Asia Pacific, based in Hong Kong. His knowledge of Asia led him to become Managing Director of a luxury goods company with branches in more than a dozen Asian countries. In 1999 he returned to the hotel industry when the founder of Mövenpick Hotels & Resorts makes him President and CEO of the group, which had only thirty or so properties in Europe and Egypt at the time. He has steered the company for fifteen years and is now close to bring it to the milestone figure of 100 hotels. He shares his thoughts on this period and the future with Hospitality-On.
It’s quite flattering to be at the head of Mövenpick group for fifteen years. It has allowed me to bring continuity with regard to brand development and making it stand out, which has always been and continues to be a priority for me. It is also very satisfying to me to have gathered people around me for fifteen years. Those progressively joined the Mövenpick adventure are seed for tomorrow, and they are proud to work for this brand.
Inversely, could this continuity be sign of immobility or caution in your management ?
If you chose to ignore the changes and challenges we have faced over the last fifteen years, then you might say that. One of the major risks we took was to voluntarily remove 25 properties from the network, when my challenge is to expand it. It was a thought out choice intended to preserve the coherency of the brand’s positioning with respect to our guests. A second is to have invested a great deal very early in distribution and Revenue management. We allocate 30 to 40% of our annual budget to these expenses with recent peaks; this is enormous for a group our size. But it is a challenge we must face within the context of a digital revolution. Also, if you look at development rates and areas, then it is clear that we took the risk of insisting on the Gulf States while everyone was encouraging moderation, so today we are present there with close to 30 hotels. We are the second brand in terms of notoriety and have a dozen of other projects in the pipe.
With hindsight, did you make mistakes?
I should have followed my instincts when we were in Disneyland Paris and I had the feeling that the park’s key metrics in terms of distribution and arrivals did not justify our presence, in any case not in the second tier hotel zone when you need to be front row. We were right to stop that experiment quickly. Aside from that, risks have always been moderate and fairly successful. The return on capital invested has not been negative in fifteen years and – without giving exact figures – it is positioned towards the top of performances across all groups.
What changes in the hotel world are most evident in the recent period?
There is a lot more transparency and readability in the hotel trade; and paradoxically it has become more complex. The fundamental notions of reception, quality service, staff management now combine with the skills required by the digital economy, and by the required reactivity and customer behavior comments. We have more exposure in the media and on the social networks and are more fragile in terms of differentiation through online distribution. I spend close to one third of my time optimizing commercialization to ensure that the revenue generated will meet with the expectations of our owners-investors.
Are their demands more difficult to meet?
Our operate assets represent a real estate value of more than 5 billion dollars. We manage them on the behalf of a hundred or so different owners. We can expect them to be demanding. Discussions were different fifteen years ago as they were more likely to take our affirmations at face value. Today, owners are advised by asset managers who question the level of our results. It is important to anticipate their legitimate questions and have precise answers. This forces us closely examine our actions. The situation is like that of a musician who has learned to play by ear and then must learn music theory. Our directors and managers have learned their scales when it comes to finances, distribution, and revenue management.
Out of a relatively modest chain, you succeeded in creating a hotel group that is currently present on three continents, what was most difficult to do in order to maintain the foundations of your corporate culture?
There are fundamental areas that must remain under the control of headquarters: brand management, distribution, contractualization of partnerships, the intimate relationship with owners… and operational subjects that may be decentralized. It is difficult to find the right balance to encourage autonomy and daily operations avoid infringing on without producing such a level of independence among regional directors who would become like local barons. My personal conception is that of a tight-knit commando. I am lucky I have been working close to managers for several years, so I regard them more as partners than employees. We operate using light reporting that is good quality and sticks to the essentials, and a permanent dialogue that means I am alerted as soon as a subject becomes strategic for an owner and it is necessary to defuse a situation. I believe I can affirm that I am one of the rare CEOs who has personally met the vast majority of our owners.
Is the “symbolic” goal of 100 hotels open by 2015 still a reality? What could the next stage be to maintain the motivation of staff?
The figure of 100 operational hotels in 2015, versus 83 today is about to become a reality, despite a few geopolitical or economic vagaries that slowed financing and construction. New momentum is necessary to make an impression. The new goal has been fixed at 125 hotels in 2020 with a geographic breakdown that relies on a new balance: twenty or so hotels in Europe, thirty or so in Southeast Asia, as many in Africa and forty or so in the Middle East, which remains a strong pillar. We strengthen our position in Saudi Arabia and the other Gulf Emirates such as Abu Dhabi or Oman. We are pushing into emerging countries but I am proud to have signed a new-build property in Basel, that will open in 2018. This will be the first new built Swiss hotel in 25 years.
Isn’t it a little bit late to be arriving in Africa?
If we consider Egypt to be part of Africa, then we have been there since the group’s origins. We have also had an iconic property in Accra, Ghana for a long time. It is undeniably the continent that will act as a growth relay for our industry considering the obvious needs and lack of equipment in Sub-Saharan Africa. Indeed it is important to take our positions quickly, which we are doing.
You preferred organic growth with a maximum of new constructions… which is necessarily slower than takeovers and mergers-acquisitions, are you ready now to strike a “strategic deal”?
2014 was a year of growth with the signature of a dozen or so new hotels, including one-third being converted. I would like to achieve a 50/50 balance since it is more interesting to convert a property that will rapidly generate revenues and that we can dress in our colors through the renovation. This is what we’ve done in Paris, Tunisia, and Egypt. To answer the second part of your question: we do not rule out the possibility of acquiring a hotel management company.
Historically you are in areas that are currently experiencing a great deal of geopolitical turbulences.… How do you manage these situations?
The fact that the company is Swiss acts as a pacifier. Our properties in Palestine, Thailand, Africa are havens where NGOs, diplomats, journalists, and business travelers may gather. It is part of Swiss DNA and our hotels function very well, plus we are not those who bear the risk of investment.
Do you have any secret American dream? Under what conditions?
From experience, I believe that the American market, like the Chinese market, requires means we do not have. You must quickly reach critical size and this requires a great deal of energy and partners. I have often said: selecting deals that we don’t want to go through can enrich us. These are two markets where our commercial presence is small and where we will not develop in the short term. It is however possible that a chain may come to us one day to set up a commercial partnership. That will be the right time to consider it.
You have always had a strong single brand policy, are you still thinking that way?
There is still so much growth potential for the Mövenpick product the way it is and the way we want to make it evolve that I am resisting the temptation to diversify. That does not mean that I do not pay attention to what is happening on the other segments, especially “limited service” ones. But the priority is to more intensively convey our message of “Natural enjoyment” which fits the image of quality, pleasure, generosity. This is why in 2015 we will launch a campaign to further glorify the notion of service.
Is the group’s Swiss signature a powerful argument that you capitalize on?
There is no doubt that Switzerland is one of the most beautiful countries in the world and that very positive values are associated with it. Defending our attachment to this signature does not mean creating a caricature but using references to quality standards while giving them a personal tone. I hope that the 17,000 collaborators at Mövenpick properties around the world give their personal touch to this recipe that uses all the good ingredients of our trade. In the Swiss culture Man tends to hide behind guidelines. We want the human dimension to be affirmed in customer relations. In many countries, especially in Asia, there is a natural dignity to the notion of service. Natural Enjoyment is the happiness of having a client and making him happy with warmth, kindness and a certain reserve that goes with the upscale.
You have always cultivated a kind of modesty –both personally and regarding the group – is this reasonable in a world where showing stength is appealing to investors?
The Swiss are modest, but efficient. The Mövenpick group is not part of the major league in our industry and has no mission for a certain arrogance. My daily obsession is to “deliver” the promise I have made to my owners and collaborators. My second priority is to make them happy. You work better when you are happy and proud. My concern, which is in keeping with what I said about the brand, is to associate more fantasy and romanticism with our efficiency. My being French can contribute to this.
Fifteen years is almost a generation today, do you think your skills are still up to date?
Four or five years ago I became aware that the areas we needed to control rely on the confidence of the collaborators we have hired. Affinity is not turning me into an expert in the new technological areas that are developing at a considerable rate. I am stimulated by this new generation that is able to take the changes that are happening in our everyday lives and bring them into the corporation. It is necessary to be able to maintain a direct and very open relationship with these collaborators to ask for explanations when necessary and without any false modesty. I have the strength of experience.
What remains to be accomplished?
I feel there is still way to go with this brand to which I am very attached. We are reaching a size that will allow it to gain more notoriety and thus there is more to do. The great danger for brands, which we have already seen in the airline industry, lies in uniformity. Profusion makes them less readable. In the hotel industry we are far from truly differentiating the major brands. This is important for the public who must stand out by choice and not by default. This is also true for our shareholders for whom the brand is an element of valorization. From my experience in the luxury industry, I can measure the gap with the valorization of these brands. There is another area that will mobilize me further than in the past, it is the Shine (Support hospitality in nurturing education) program. It offers young people aged 16 to 18 a possibility to find a career in this industry through a training program that propels them into a world that was otherwise inaccessible. It began in Nepal and Vietnam and I wish to expand it to all the countries where Mövenpick is present. In Switzerland, a country that has some of the best hotels schools worldwide, partnerships are quite natural, and development is only just beginning.