Control what you can control. Throughout the COVID-19 pandemic, both individuals and businesses have leaned on that daily strategy.
Camil Yazbeck, Accor's senior vice president, head of development, Europe, said the France-based hotel company — and Europe’s largest hotel firm — is doing just that, while acknowledging the pain the last 16 months has brought to the entire industry.
In a Q&A with Hotel News Now, Yazbeck said 2020 has been Accor’s second-best year in terms of hotel signings in Europe and the U.K. By the end of 2020, Accor's number of signings reached approximately 18,500 rooms.
Why has Accor seen such great signing numbers in what has been a generally awful year? Is it owners looking for security, and if so, why do they want it with you?
That’s the entire market’s highest share, and it comes from being very focused, thinking like owners, thinking of their investment criteria and understanding their goals.
We think of their cost of capital, their hold period, their debt, [return on investment, internal rate of return] and risk versus return spectrum, and we match the right brand and try to structure the deal with the owners’ investment criteria in mind.
We equally integrate augmented hospitality in our offer, by also including revenue generation, operations and cost optimization, coworking solutions [a platform named Wojo], e-commerce and loyalty, design and technical services, IT and environmental and [corporate social responsibility], among other value-adds.
We are an owner-centric group, focused on long-term relationships built on trust and optimizing owners’ returns.
Europe has always been Accor’s strongest market. Do you see growth there?
In Europe, we are No. 1 in terms of deal signings, with 37% market share for 2020, and in terms of openings, we also led the way. These signings bolstered our pipeline, the largest of any hotel group in Europe, comprising 400-plus projects and 56,000 keys.
We have the largest network in Europe, the most diversified portfolio of hotel and residential brands, and we are the leader in lifestyle experiences, [food and beverage] and entertainment. We believe we have the most innovative loyalty program in the world.
Accor in recent years has transformed from a hotel group into an all-in-one platform in which guests can live, work and play, a unique ecosystem of hospitality services. Accor Live Limitless [ALL], our loyalty program allows guests access to co-working spaces and entertainment, including restaurants, bars, nightclubs, sports, spectacular destinations and unforgettable experiences.
Where in Europe do you see the strongest growth?
Accor is seeing particular strength in signings in the United Kingdom and Ireland, the DACH countries of Germany, Austria and Switzerland and the Benelux countries of Belgium, Luxembourg and the Netherlands.
There is also strong growth in Eastern Europe, and Russia is back to normal. They say, "Do not let a good opportunity go to waste."
On top of being number one in Europe for 2020, I’m proud to say Accor’s 2021 results continue to be strong, equally across all of these Northern European markets. In [the first quarter] we were number one, with 39% of signings’ market share.
Hotels remain a valued asset class, and when you add that to what Accor offers in terms of augmented hospitality, the access to entertainment and events, the play element, and the coworking element, we have become very attractive. Our ALL loyalty program has grown significantly to 68 million members. That’s huge growth, and we’re very European-focused, and owners see that, too.
Are conversion opportunities helping those numbers? After all, Accor has 41 brands across its portfolio, seven of which offer more flexible standards.
There have been a lot of new Mövenpick Hotels & Resorts, Mercure, ibis Styles, Tribe; all have been very strong brands and continue to grow, with a lot of independent hotels wanting to benefit from joining.
And the Ennismore platform [Accor formed a partnership with Ennismore in November 2020 to create a new lifestyle division] has allowed us to attract an even larger investor base seeking to capitalize on lifestyle as the fastest-growing hotel segment. This powerful platform offers 12 world-class lifestyle brands, including Mondrian, Hyde, SO, The Hoxton, 25hours, Mama Shelter, Tribe and Jo&Joe, as well as countless innovative destination restaurant and bar concepts.
Is there a lot of capital waiting out there?
Despite investors queuing up to spend capital, many hotel owners are reluctant to put their properties on the market, instead wishing to gain more security and fast-track their hotel’s recovery by partnering with an established chain.
I do not believe there will be much distress, but some repurposing and more repositioning opportunities in order to diversify risk within a property. Yes, that is what is happening. If you add [food and beverage] and entertainment and, for example, extended stay, branded private residential and co-working elements into that, there will be a lot of positive movement to increase the value of the properties, I believe.
This is in tune with the long-term strategy of Accor, to be the biggest player in Europe. We are now 96% asset-light and a full-service provider, which allows us to offer a wide range of possibilities to our partners. It leaves our teams free to fully dedicate themselves to helping owners optimize every square meter of their properties while keeping Accor’s DNA at the heart of what we do.
There is a lot of staycation and extended stay, and corporate demand is starting to come back. Then, of course, with resurgence of leisure demand, we have seen strong appetite from our investors for our resort brands such as Rixos and Banyan Tree.
Will we see luxury come back sooner, rather than later?
Luxury hotel deals continue to be prominent and investors’ interest in Raffles, Fairmont and Sofitel remains high.
There are lots of letters of intent, and they turn into hard signings, and then we start work immediately.
It’s all down to my team and a positive mental attitude of never limiting oneself with just achieving signings targets … and down to us thinking like owners.