The president of Louvre Hôtels, a company that brings together the brands of the old Envergure group and Hôtels Concorde, has turned the last eight months to profit to organise its team and perfect its development strategy. It is organised around three themes: brand identity, international development and a stronger presence in the upscale niche.
We must work more on brands so they have a clearer image that is more in keeping with their epoch. The marketing team is reorganised with product managers by brand to give content and value to each of them. In general, we must be more creative in how we communicate and follow our clients. We have decided to concentrate on our top-ranking position in France in the two-star niche, which supports our international ambitions in economy hotels, and on upscale development thanks to the prestige of the Concorde hotels. We have the luck of not being very present on the three-star segment.HTR: Will you take more recourse to franchising? _ Y. C.: Franchising is one of the development tools that we use for economy hotels with management that is very attentive to the needs of franchisees. We see them regularly through different work commissions. At all levels there is a real human relationship that goes beyond contractual relations. This puts more pressure on us and this is good. When markets are favourable to franchising, Kyriad presents fine opportunities for development. This product is less standardised in its architecture, but it must respect strict service standards. Future partners must therefore be accustomed to following rules.HTR: Are you announcing the abandonment of Bleu Marine? _ Y. C.: A hotel chain implicates a presence in the great European metropolises where traffic abounds thanks to new communications technology. To develop Bleu Marine, means managing an additional brand whereas our goal is to recentre. With Kyriad, we succeeded in rapidly positioning a new hotel brand. Its extension with Kyriad Prestige is more effective with two priorities: refine the product with respect to Kyriad classics and accelerate development, first in France and then throughout Europe, to make the chain effect work. We stop developing Bleu Marine.HTR: How do you plan to make your economy hotels evolve? _ Y. C.: Evolution affects two aspects: concepts and their development in France and internationally. We are N°1 in France on the two-star niche through Campanile and Kyriad with a firm plan to hold this position. Campanile needs to do some work as far branding and logo go to give it a boost. Our first consideration concerns F&B. It was a pleasure for me to see that Louvre Hôtels carries F&B in its genes. We have all the expertise necessary on up to Michelin stars to master concepts. Four sites will test new forms of F&B services that will become operational starting in October. After validation in the 1st quarter 2006, this new concept will be implemented as the network is renovated and constructions are completed. The second consideration has led to experimentation with new room models in our latest openings in Murcia in Spain and Rivoli in Italy. After the trial period, the new Campanile room will be developed at new openings and renovations. We are finalising Kyriad’s new restaurant concept developed around Karousel in an invitation to culinary travel in different forms. Finally the new, more pleasant, visual identity of Première Classe woven around a little flower accompanied the launch of the new room concept at four sites. This resulted in increases in occupancy rates or average daily rates and often both. By the end of the year thirty or so hotels, including 18 subsidiaries, will be renovated. The goal is to have between 80 and 90% of the chain in its new format at the end of 2007.HTR: What is the next step? _ Y. C.: Our biggest area for work is development. We are following an annual rhythm of 12 to 13 openings and the goal for the next three years is to multiply three-fold in three priority directions: Eastern Europe through our strong presence in Poland starting with the capture of that country, aside from Warsaw, with Campanile and Première Classe – brands that correspond very well to the market’s maturity - and then to expand to neighbouring countries. The second axis is the United Kingdom, still with Campanile to avoid any confrontation with the new brand Premier Travel Inn by Whitbread. The third axis is Spain and Portugal, with Campanile first and with Première Classe later. The key goal is to create a veritable European network for Campanile. Our goal is clear, when we enter a country, we must aim at the top three rungs, otherwise it’s a waste. HTR: Don’t these markets risk saturation? _ Y. C.: As compared to the French market Europe is still pretty far from such a situation in terms of economy hotel chains. In France, there are more than 1,500 hotels, in England there aren’t even half that number; Germany, Spain and Italy, Eastern European countries are well beneath that. There is room for growth like in Spain. In my work at EuroDisney, I met with Spanish contacts who are Anglo-Saxon-style risk takers with a resourceful Latin touch. When they make a commitment they follow through until the end. I see a lot of opportunity for development in the economy category.HTR: How do you see your role in four-star hotels? _ Y. C.: Our start sheet is Concorde, which deserves pointing out as it fills out the brand and assures its development. Today, the Concorde chain has both hotels it owns and operates as well as hotels in affiliation with the reservation centre. There are other operating models that we have not used such as pure management contracts or management with minority participation.HTR: What is the potential for Concorde’s international positioning? _ Y. C.: If there is one French luxury chain, it’s Concorde. The image of the French palace is identified with the Crillon, the Lutétia, the Martinez,… for which we have a major investment plan. We have the legitimacy of mythical palaces in mythical cities with an upmarket product and service in star-studded hotels and restaurants. This experience may be used throughout Europe. Today we are being contacted by investors looking for a product that is different from the two models that prevail in luxury hotels: American and Asian. We have the possibility to develop a French model with a European touch everywhere we are established.HTR: Will affiliates have a role to play in this schema? _ Y. C.: We are bringing together 62 affiliated hotels in Rome next September to develop new “win-win” working relations. We are improving the Internet reservation site and we are reinforcing the sales network by reopening an office in Germany. Marie-Bé Lallemand, General Manager Luxury Operations will undertake promoting the visibility and readability of the Concorde chain. We already have experience in cooperative efforts such as training chefs, which we have just realised with our affiliate Tokyo Hotels. They will enter the Crillon in the brigade of Jean- François Piège.HTR: Where do you plan to develop the presence of Concorde? _ Y. C.: Anywhere that we can make a difference through our French-style luxury approach and everywhere that the clientele that stays in our French palaces can justify our accompanying them. We have reclaimed the Hôtel de la Paix in Geneva through a lease and it is now undergoing works, and we are building a hotel in Berlin, as well as a hotel in Marseilles. There is a place for us at key destinations in Europe and eventually in the Middle East and Asia.HTR: Will you develop new concepts? _ Y. C.: The only market where Concorde is not yet present is the resort market. This product needs to enter our range soon in order to complete our upmarket offer and we are working on this.HTR: Do you have sufficient financial means to back all these developments in the face of competition in Europe and worldwide that are mobilising enormous capital? _ Y. C.: We are in the process of organising another legacy approach with recourse to real estate investment trusts. The group has a small debt and thus has a wide operating margin and, third lever, we are ready to work more with partners, which was not part of the group’s original culture, in order to generate a multiplier effect.HTR: Will you take more recourse to franchising? _ Y. C.: Franchising is one of the development tools that we use for economy hotels with management that is very attentive to the needs of franchisees. We see them regularly through different work commissions. At all levels there is a real human relationship that goes beyond contractual relations. This puts more pressure on us and this is good. When markets are favourable to franchising, Kyriad presents fine opportunities for development. This product is less standardised in its architecture, but it must respect strict service standards. Future partners must therefore be accustomed to following rules.
