SINGAPORE — Accor CEO Sébastien Bazin is thinking beyond the era of transformation he has been in for the last decade.
That’s not to say he’s done. In fact, far from it.
“We bought a lot in the last 10 years, but we haven’t added anything serious over the last three years, and I don’t miss it,” he said in a candid general session interview at the Hotel Investment Conference Asia Pacific in Singapore this week. “It was necessary for Accor to be transformed, and I seriously believe Accor has been transformed. That doesn’t mean we won’t do anything more; it means it’s time to bear the fruits.”
In 2015, the French company bought FRHI Hotels & Resorts, owner of the Fairmont, Raffles and Swissôtel brands. The following years brought vacation rental company Onefinestay, new brand Jo&Joe, Orient Express, Mövenpick Hotels & Resorts, 21c Museum Hotels, Our Habitas and more into the company. At the end of June 2024, Accor had 5,682 hotels including more than 838,000 rooms in more than 110 countries.
And bearing the fruits to Bazin means 9% to 12% growth annually, which he said is on track.
While mergers and acquisitions have been a hallmark of Accor’s last decade, his current take on industry mergers and acquisitions is that “there’s no need for any big M&A right now,” he said. “I don’t really believe we’ll see further consolidation.”
Topics other than adding new companies take more of his time these days. Chief among them are talent, artificial intelligence, sustainability, and how to best optimize his company in China and India.
Those topics are top of mind for most hoteliers here at the HICAP event, and Bazin is tackling it head-on.
“We know that travel and tourism are blessed industries for the next 20 years. We will have 3% to 7% demand every year for the next 20 years and supply growing at max 2% to 2.5%, meaning we are entering a period where demand is exceeding supply by three times,” he said. “So the question is, where are you playing and how do you play?”
Here in Asia, Bazin said it’s a priority to “play smart” in both China and India.
“We don’t make much money in China. It’s a great market, but we don’t make much money there,” he said. “And what do we do about India? It is by far the best and largest opportunity for hospitality for the next five to 10 years, but how do you play in India?
“It’s super difficult, and today I am thinking how do we rethink and do things differently?”
Accor’s growing luxury and lifestyle brands portfolio is where Bazin spends a lot of his time, also serving as division CEO for the company’s Luxury & Lifestyle division, which is growing at a fast clip, outpacing the growth of Accor’s legacy core of midscale and economy brands.
The company’s Ennismore division, which includes 17 luxury and lifestyle brands, grows 25% to 45% annually, Bazin said. And while he’s accustomed to the high-risk, less-predictable growth landscape that comes with lifestyle and luxury hotels versus more stable, cash-flowing midscale and economy hotels, Bazin is worried about the trajectory of luxury and lifestyle growth.
“We have ended up over the last couple of years in an unhealthy situation, where [requests for proposal] ask the five big global brands to compete [for lifestyle and luxury hotel contracts]. And whoever wins will have to pay more in key money to get the hotel,” he said. “It’s so capital-consuming to play that race.”
In the future, Bazin said his dream is that “there are no RFPs for luxury lifestyle and don’t even ask me for key money. I am the brand you need and love. The game of us being on our knees and begging investors to give us the capital? That game is unhealthy.”