HOLLYWOOD, Florida — Already a player in the region with brands lower in the chain scale, Accor has been setting the stage to add more of its luxury and lifestyle brands to Central America and the Caribbean.
Accor has bolstered its team in the region in recent years, creating strong results, said Mark Purcell, senior vice president of development, North and Central America, in an interview at the Hotel Opportunities Latin America conference. The company’s focus in the region, and Mexico specifically, has been playing within its entire brand structure, from economy up to luxury. The company has a robust portfolio of Ibis and Novotel properties both existing and in development.
There’s been an opportunity, again specifically in Mexico, for more lifestyle and traditional luxury properties in premier resort destinations, he said. There’s strong pipeline potential across its luxury and lifestyle brands through conversions and new developments.
In the Caribbean, Accor has focused its current platform to luxury properties on the islands, such as the Fairmont brand in Bermuda, Barbados and Puerto Rico, he said. It also recently opened an SLS at Baha Mar, a mega resort in the Bahamas. The company historically hasn’t focused heavily on the Caribbean, but it has renewed its efforts to be a key player in the market.
Outside of Mexico, Accor’s presence in Central America is somewhat limited currently, said Nicolas Martinez, vice president of development for Mexico, Central America and the Caribbean. The company is preparing to open the Sofitel Legend Casco Viejo Panama City and is chasing other opportunities in the country.
Accor is looking to expand its presence in countries where it already has properties, using its lifestyle and luxury brands, he said. It makes more sense to grow with these brands than to enter a new market with a single economy-branded hotel, he added.
There has been tremendous growth and interest over the past few years in luxury and lifestyle in Mexico that resonates with American travelers, Martinez said. Accor has opened a Sofitel in Mexico City and an SLS in Cancun. It’s also signed an MGallery in Cancun as well and announced a Fairmont in La Paz in Baja California Sur in Mexico.
Accor is also working on a number of hotel projects that include residences, Martinez said.
“There’s a lot of interest, especially from the U.S. market in it, so we’re getting a lot of traction there,” he said.
All-Inclusive Resorts
Accor recently announced its entrance to the all-inclusive resort space, using several of its existing brands, Purcell said. It has a great platform building on the experience gained through its Rixos brand deal in 2016, he added.
“We’re going to try to take that knowledge and experience of the team and export that back to other parts of the world where we feel that model can be super successful,” he said.
The company currently has 26 all-inclusive properties with more than 10,000 rooms, Martinez said.
That footprint makes Accor a competitor in the all-inclusive space on a global scale, Purcell said. Within the Caribbean and Latin America, the company will focus specifically on the Riviera Maya area of Mexico, the Dominican Republic and possibly Costa Rica.
The all-inclusive resorts will use the higher end of the spectrum of Accor’s brands, such as Fairmont and Sofitel, Martinez said.
“We want to leverage what we have created here through the many years that we’ve operated in the region with the expertise of Rixos,” he said.
Finding the Right Deal
When moving forward on new projects in the region, Accor executives wants to ensure they have good investment partners, there’s enough airlift to the market, there’s enough labor and there are correct demand generators to justify the investment tied to the level of the brand’s positioning, Martinez said. Particularly for luxury or ultra-luxury properties, the company wants to make sure the rates it will generate would be enough.
“We want to make sure that we can provide all the services,” he said.
There are a lot of factors that come into play with partners and developers to maintain a fruitful relationship that will last decades, Martinez said.
Supply-chain disruptions have been a challenge for new projects, Purcell said. In recent talks with developers, he said Accor executives are having to think much further ahead than they had to years ago. They must be in position to order materials 12 months out when they would have ordered six to eight months out before. What required 12 months in the past now takes 18.
“It really has become a logistical planning challenge,” he said.
Though Accor isn’t the project manager for new-builds, it does require a concerted effort from the entire team involved, Purcell said. Everyone has to be on the same page.
The upside in this situation is the recovery has been so strong that as long as the demand trend continues, that can make up for some of the financial stress caused during development, Martinez said.