BERLIN — The global hotel industry is navigating uncharted waters, but Accor Chairman and CEO Sébastien Bazin encouraged hoteliers to prioritize local experiences and standout service to weather the storm.
In doing so, hotels can still drive domestic or regional travel demand if international tourism takes a hit, Bazin said during an interview at the International Hotel Investment Forum EMEA earlier this week. As the conference concluded midweek, U.S. President Donald Trump on Wednesday unveiled a 10% tariff on nearly all countries along with reciprocal tariffs on 60 countries as high as 49%, which are set to begin April 9. Trump announced a 20% on countries in the the European Union and a 10% tariff on the United Kingdom.
Despite the global economic uncertainty ahead, Bazin predicted travel trends will continue to evolve as they always have. Travelers will flock to certain cities or countries or adjust their trips for a multitude of reasons. But the intent to travel is still present.
“People will travel more and more domestically, not at the expense of international travel. I think every year there will be [for individuals] one trip less but over the year for two days more. The new generation is desperate to travel,” Bazin said, adding that he views Europe essentially as one destination with how easily people can travel across the continent.
But for any destination or market to gain international visibility and drive wanderlust among travelers, its local stakeholders must put in the work to make it enticing for investors, developers, employees and local residents too.
“Eight years ago, I said, we needed to move away from the international traveler and focus on the local inhabitant as the international traveler will find those destinations as they are sexy or vital or buzzing,” Bazin said. “The trends are rather positive but diverse. There are three things: a growing demography, a growing middle class with good purchasing power and improving transportation. How rosy it will be for hoteliers will be based on where do you want to play and how do you want to play?
“They will remember the smile, the entertainment and the experience,” he added.
Despite the rocky geopolitical environment, Bazin reminded hoteliers to be hospitable to all who stay at their properties.
“Let's leave the leaders to decide what they have to decide. It's all about caring, interconnecting people and culture. Let's not miss that moment and be too focused on government leadership,” Bazin said.
Julia Simpson, president and CEO of the World Travel & Tourism Council, said the hotel industry is well-placed to overcome its latest challenge.
“I come from the airline background, the airlines often are at odds with one another. Sometimes [the hotel industry] will bicker as a family, but we are a family, and we do come together to talk to government,” she said. “I do, though, think we will see fewer travelers to the U.S. in the short term.”
The operations effect
Strict U.S. tariffs will raise the cost of doing business for almost every industry. Bazin said there is no doubt tariffs will cause some pain, but hospitality is pretty resilient overall.
Luxury travel will not be affected much, Bazin predicted, joking that half the luxury goods on the planet originate in his native France.
“Luxury guests spend twice as much and visit twice as much. It takes a different experience to run luxury,” he said.
A significant unknown is how the hotel industry's persistent labor challenges will be affected. Julia Simpson, president and CEO of the World Travel & Tourism Council, said hospitality lost 100 million positions due to cuts made during the COVID-19 pandemic.
Filling hospitality jobs is getting a little easier at least. Accor hired 142,000 people in the last 12 months, Bazin said.
“We see 25% turnover on 350,000 people, but we also opened 300 hotels in the last year, so we need a further 50,000. What I am proud of is that 17% of those 142,000 people never went to university or had a job before,” he said.
Looking ahead, Bazin said the hospitality industry has to keep growing around the world to provide not just memorable travel experiences but also stable jobs for working-age residents.
“The World Bank said that in 10 years from today 1.2 billion people of those aged between 18 and 25 years will be looking for a job. Tourism and hotels could provide 425,000 jobs, so that means 800,000 will not have a job, and that can only lead to more violence, more drugs, more unrest, more riots. We have a mandate to do more in unprivileged countries,” he said.
Multi-generational travel
How Accor reaches different generations of travelers is always top of mind for Bazin.
“The average Accor guest is 47 years of age. We are not thinking enough of the 15- to 30-year-olds. We need to adapt. That might also have something to do with the average age of hotel firm CEOs,” Bazin said.
Simpson said multigenerational travel will continue.
“Three generations together. When I was young, it was never more than two, but now it is the oldest generation paying for the youngest generation to go as a family,” she said.