Accor held its Capital Market Day on June 27, 2023. Usually held every two years, the event hadn’t happened since pre-covid period. An expected rendezvous to share with the market the new organization Turbo, imagined by Sébastien Bazin and the strategy for the years to come.
Expanding Opportunities:
“Accor has provided employment opportunities to over 123,000 individuals in the past 12 months, with nearly 60% of them being first-time jobholders.” Stressed out Sébastien Bazin in his opening remarks.
Maintaining financial independence and a strong balance sheet was a priority for the company through the Covid 19 crisis and they succeeded. This moment was also when Sébastien Bazin realised how hard it was to pilot the company and its numerous brands. This is how Turbo was born. To simplify and gain in effectiveness and efficiency.
Streamlined Organisational Structure:
Accor has undergone significant organisational changes, with 80% of the current top managers being different from four years ago. Furthermore, 60% of these key employees have changed job positions in the last four months. The implementation of Turbo, which aims to ensure predictability and resilience within Accor's two divisions, has had a strong impact on the company.
Digital Transformation:
Alix Boulnois: « My team is part of this shared platform; we are servicing both ecosystems.This is not about tech for tech but to drive more speed and agility within our activities.”
Accor has placed a strong emphasis on digital transformation through the establishment of a digital factory, bringing together engineers and product managers under one roof in 2021. The company aims to accelerate its digital transition, taking inspiration from successful tech giants' product delivery approaches in the United States.
Distribution and Loyalty:
Accor has expanded its distribution channels, with more than 1,100 channels available, representing a 20% increase compared to pre-pandemic levels. The company aims to further expand with local partners, strengthen revenue management channels, increase non-room distribution (such as Allfood), personalize direct channels, and optimize brand websites and apps. Additionally, Accor's loyalty program has experienced significant growth, with 89 million members worldwide, generating higher levels of engagement and increased spending.
Sustainability and Governance:
Brune Poirson: “Everything we do is grounded in science & performance measure.”
Accor aims to operate within planetary boundaries while making it a competitive asset. The company emphasizes the integration of strong governance, financial and extra-financial performance, and the understanding that sustainability is everyone's responsibility.
Brand Focus and Development for Premium, Midscale and Economy (PME)
Jean-Jacques Morin: “Duncan O’Rourke & Patrick Mendes both have a deep experience in the hospitality industry and internationally which is very important to drive the business.
When we start a strategy we need to go on the last miles. In the end, strategy is what you don’t do. We must focus on what we do best.”
The company seeks to consolidate and strengthen its midscale and economy brands while going further with premium offerings, which generate higher fees. Even though midscale & economy hotels are less affected by the crisis.
“ibis the best-known economy brand, Novotel is in the top 3 and Pullman the oldest one as it was created in 1867.” Said Jean-Jacques Morin
Today the company is working with 30% of franchise that represents 36% of the room portfolio. Developing franchise is one of the growth levers.
“Wherever it makes sense, said Jean-Jacques Morin, meaning in cities for instance, we will develop franchise.”
Asked about Accor’s relationship with Association des Franchisés Accor (AFA), both Sébastien Bazin and Jean-Jacques Morin stressed out the good relationship with AFA. “Talking to them is actually a way to progress.” declared Jean-Jacques Morin.
A common strategy for Patrick Mendes (Europe and North Africa) and Duncan O’Rourke (MEASPAC) who are both leaders on their markets: consolidate where Accor is leader and seek for strategic development opportunities. Keeping in mind the two key priorities: to impact EBITDA & Client perception.
Luxury and lifestyle division:
“The birth of this division is the result of 8 years of conviction, commitment and coherence.” Reminded Sébastien Bazin. “Among 7 luxury brands which were born more than 100 tears ago in the hospitality, Accor owns 4” he added.
Mark Willis, Maud Bailly and Gaurav Bhushan presented their strategy for the brands they are heading. Once again it about clarity, digital transition and exploiting as much as possible the history of this brands, as well as the personality of their founders for the lifestyle ones.
The luxury and lifestyle segment aims to target the growing middle class, emphasising the importance of brand loyalty.
“A lifestyle brand is a brand that understood that its customers are also within a 5 minutes’ walk distance from their properties.” Said Sébastien Bazin.
"I have never seen a momentum like this", said Gaurav Bhushan co-head of Ennismore, "the response from our owners and partners is far beyond my expectations!"
“We know where the demand is, we know where the brand love is.” Added Sébastien Bazin. “I don’t think we have too many brands; I thank there will be more brands in the future. Customers need to feel that they belong to a brand community.”
Accor's Capital Market Day provided insights into the company's growth strategy and market focus. With a focus on employee empowerment, digital transformation, sustainability, and brand development, Accor aims to execute its plans to drive profitable growth and enhance customer perception. By staying tactical and prioritising execution, the company is well-positioned to achieve its ambitious goals in the coming years.
Sébastien Bazin concluded: "It's no longer a question of strategy, it is now all about execution."
Earlier in the day, Sébastien Bazin and Jean-Jacques Morin took a moment with the press.
“There is no necessity to become a worldwide leader, we decided to target leadership in our top destinations.” Declared Sébastien Bazin.
Asked about payment solutions, both recognised that the partnership with Visa doesn’t move as fast as expected. “It is an important topic though, because it is a clear expectation from the market.” Added Jean-Jacques Morin.
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