BLOOMBERG LINEAR — Combining leisure travel with business travel, or vice versa, is one of the sector’s key trends, reflecting the new reality of hybrid and remote work, which is also a legacy of the pandemic.
The hotel industry has picked up on this trend and is now better able to accommodate this most frequent guest behavior: wanting to reserve a space such as a room for work only, but not giving up on enjoying leisure and sightseeing options. We are trying to adapt our operations.
said Jean-Jacques Morin, global CEO of PME (premium, midscale, economy) at French group Accor, one of the world leaders in this field.
The French executive, who also serves as global executive vice president for finance, strategy, IT, legal, purchasing and communications, and has been a member of the executive committee since 2015, said in an interview with Bloomberg Linea while in Brazil: stated. Currently, 40% of travelers say they combine business and leisure in their destinations.
The hotel chain’s performance has been boosted since last year by large-scale entertainment events and the return of traditional conferences and corporate conferences.
See more: Here are the world’s 50 best hotels of 2024.
“This means that if you are traveling somewhere for the weekend, you will have work to do at the hotel on Friday and will need a meeting room with Wi-Fi, computers, etc. We need to provide opportunities to work,” says Morin.
The trend is being driven by a new generation of guests who value sustainable practices, and the world’s leading hotel chains are expanding into new regions with greater expansion potential, such as China, India and Latin America. It happens when you are developing your growth strategy. And the Middle East.
In these markets, the rise of the middle class is stimulating travel and increasing opportunities in this sector.
Founded in France in 1967, the group’s portfolio includes 45 brands from luxury to economy segments, including Raffles, Orient Express, Fairmont, Faena, Delano, Sofitel, Pullman, Grand Mercure, Hyde, Novotel and Ibis. It is. Over 5,500 units in over 110 countries.
Accor’s PME division operates 450 hotels in 12 countries, with ambitions to reach 600 by 2027-2028, said Thomas Dubere, CEO for the Americas. are.
“We will be opening another 150 new hotels over the next few years. 80% to 90% of this expansion will be through a franchise model. We don’t want to go to every country in the region. We will choose the ones that we know are in demand domestically and internationally. In Brazil, we are absolute number one,” Dubéa said in the same interview. .
Accor owns 331 hotels in the SME sector in Brazil (11 premium, 80 midscale and 240 economy), of which 50% are operated under a franchise model with third-party groups managing them. There is.
The latest bet in Brazil is the opening of a hotel by Australian brand Tribe in Belo Horizonte in December. According to the group, the capital of Minas Gerais state was chosen for its buildings featuring works by Oscar Niemeyer, such as the Pampulha complex, which is exactly one of the chain’s hallmarks: its penchant for design. It is said to attract tourists.
Another focus in the Americas is Mexico. “We have just signed and opened three hotels in the seaside resort of Puerto Vallarta, Mexico,” said the region’s CEO, adding that the region’s main locations are Argentina, Chile and Peru. , he also mentioned moves toward group integration in Latin American countries such as Colombia. .
In the US, the group has selected San Francisco as the first destination in the country to host one of Accor’s newest brands, the Handwritten Collection. The Handlit Collection was launched last year and has more than 35 hotels open and under development, primarily through the conversion of independent hotels.
In Canada, the group is expected to grow with the Novotel and Handritten Collection brands, possibly under a franchise model.
See more: Bali intends to ban construction of new hotels and nightclubs for two years
The following are excerpts from an interview with Jean-Jacques Morin, edited for clarity.
What does Accor think will have the biggest impact on the hotel industry?
What is fashionable is closely related to post-corona behavior. ESG criteria is 1. Around 70% of travelers use some kind of ESG factor when booking. We take it very seriously. Another major change is the possibility of combining business and leisure. About 40% of travelers do so. Guests should be offered the possibility of working in the hotel.
The third trend is lifestyle. So three years ago, we reorganized our business and created two divisions: Premium, Midscale, and Economy, which I am in charge of. The other is lifestyle and luxury. We have invested heavily in a broad portfolio of brands that offer different types of experiences. Currently half of the portfolio is lifestyle and luxury [con marcas como Sofitel, Fairmont y Faena].
Which of the three segments you lead contributes the most to the group’s revenue?
economic contribution [hoteles más pequeños y baratos como Ibis y Formule 1] and midscale [como Novotel y Mercure] In terms of income, they are almost the same. The Premium [con marcas como Pullman y Gran Mercure] It’s the smallest. In the long run, we believe the mid-range segment will grow faster than the economy segment.
We focus on economy and midscale and have a long association with the brand we created over 50 years ago. First was Novotel in the midscale category, then Ibis in the economy category.
Next, we move on to the premium segment. We believe there is scope to capture even more market share there than we already have in economy and midscale. At Premium, we need to be better and we want to be even bigger. The Pullman brand didn’t appear until the 2000s, but it recently acquired Mövenpick and Swissôtel.
You mentioned the importance of ESG criteria for the new generation of travelers. What does the Group focus on from a sustainability perspective?
We are committed to reducing carbon emissions by 25% by 2030 and 50% by 2050. We also measure food waste and water consumption within our hotels. We work with our suppliers to purchase food closer to our units to reduce the time it takes for goods to arrive at the hotel. There is still much work to be done.
It also focuses on issues of diversity and social inclusion, such as increasing the number of roles held by women at different levels of the organization. We also guarantee Accor’s in-house training system. Currently, 60% of people who join us do not have a degree. We conduct 6 million hours of training annually. We create social promotions like this to keep professionals in the company.
What are the main challenges in implementing this ESG transformation?
This is a huge challenge from the moment a hotel is built all the way through the supply chain. To save on energy consumption in buildings, there are rules to follow. This is a way to address the question of how the hotel will function in the future because it was built the right way.
When the hotel opens, we will ensure that our purchases are environmentally friendly. We’ve built a kind of Amazon for the service industry, allowing them to choose products that meet ESG criteria.
Another initiative we are proud of is reducing plastic consumption. This means that you cannot bring plastic bottles into the hotel. Brazil has successfully used these tools.
See more: Suits return to the office and loose, relaxed clothing reigns supreme
How does Accor view the competitive environment with major hotel chains around the world?
There are 10 of the world’s largest companies in this sector, including three Chinese companies, six American companies, and Accor. We have the distinction of being the only international company in all markets outside of the United States and China. The Chinese market is dominated by Huazhu Group, BTG Hotels and Jinjiang.
American chain stores dominate in the US [Marriott, Wyndham, Hilton, Hyatt, Radisson, Best Western Choice Hotels]. Elsewhere in the world, we are number one in network size in Europe, Asia, South America and the Middle East. We have a historical presence, which is definitely a huge advantage in terms of people remembering your brand and allowing you to continue to expand your network.
In the past decade, the number of brands has tripled. Everyone has created a brand. We have a significant competitive advantage in having a broad and complete portfolio, from low-cost solutions to ultra-luxury solutions such as Orient Express and Raffles for your operational needs.
What is your strategy to strengthen your market presence?
We are in the right area. In future regions, the middle class will be the region with the greatest growth. The latest analysis of travel spending shows that people will be traveling more than they are now. And as the middle class grows significantly over the next decade, they will travel even more. By 2030, the world’s middle class is expected to grow by 1.5 billion people, requiring more resources to travel. This will drive the future of the hospitality industry.
Where does that happen? in India and China. These two locations are likely to grow by 13% annually in terms of travel spending. India has changed a lot in the last four years. And we are in a good position. Latin America is part of this equation, as is the Middle East. Growth will no longer come from Europe, but from places like Dubai and Qatar.
What role does Accor’s loyalty program play in this strategy?
We are working to further enhance our loyalty program ALL (Accor Live Limitless). We have many partners and they can spend the points they accumulate within the ecosystem. We have designed an attractive program not only for hotels, but also for collecting points and converting them into benefits.
This means members can use their points to rent a car or buy insurance. We work with banks and other financial institutions to allow you to earn points using your credit card.
may be of interest
Are you frustrated with your boss? blame it on inflation
Three economists studying Europe’s colonial legacy win Nobel Prize
Two regions with solar energy potential in Colombia
