Revamped Sofitel gains ground in luxury market
 
Revamped Sofitel gains ground in luxury market
13 JUNE 2012 8:54 AM

The Accor-owned brand emerges from its repositioning efforts with 120 hotels in 40 countries and a focus on management contracts to expand its global footprint, said CEO Robert Gaymer-Jones.

NEW YORK—Sofitel’s mytamorphose is complete. Now the florissant can begin for the French brand. Robert Gaymer-Jones, CEO of the Accor-owned luxury hotel brand, believes Sofitel is ready to blossom, emerging from a self-cleansing process that saw nearly half of its hotels leave the system during the past five years.

Speaking last week at a press briefing at the Sofitel New York, Gaymer-Jones said the chain underwent significant repositioning to emerge as a luxury brand with French DNA that has local cultural tie-ins at each of its 120 hotels comprising approximately 31,000 guestrooms in 40 countries—about 85 fewer hotels than it had when it embarked on the metamorphosis in 2007.

He said Accor decided to rebrand 60 of the properties to other Accor brands. The chain released 52 others from its system during the past five years.

“(Owners) were either not showing proper levels of investment, it was not the right location, it had the wrong clientele or the owner didn't want to put money in,” Gaymer-Jones said.

Sofitel has opened 30 hotels, including nine this year. It has 30 new-construction hotels in its development pipeline, Gaymer-Jones said. The goal is to have 150 properties open by 2015.

The results of the repositioning have been evident in performance indicators, Gaymer-Jones said.

“Using 100 as a base, we have been able to increase (revenue per available room) through 2011 by 43% over 2009, and it was up 5% in the first quarter of 2012,” he said. “Guest satisfaction was 94% in 2011.”

While declining to give detailed figures, Gaymer-Jones said the RevPAR growth is a direct result of rate gains, which are approximately 8%.

No more ‘bling-bling’
The brand is embarking on a new advertising campaign with a “Life is magnifique!” message. That campaign includes an upgraded website, customer-relationship management tool and social-media package.

“The idea is ‘approachable luxury,’” he said. “It has to be authentic; it’s not bling-bling anymore. We’re very much focusing on the senses, the look and feel of our hotels.”

Gaymer-Jones said the brand has identified 14 key cities around the world in which it wants to expand—including cities in which it already has a presence.

“We could have another two or three hotels in New York,” he said, adding Hong Kong, Singapore, Miami, London, and other gateway cities around the globe also are on the list.

“The development teams around the world are working on attracting new management contracts around the world,” Gaymer-Jones said.

The U.S. market is “incredibly important” to Sofitel’s growth, he said. The brand created a U.S.-based luxury travel agency board to help steer brand positioning.

“We didn't want to alienate the North American market,” he said. “We’re seeing positive shifts with the Chinese traveler, the Indian traveler and elsewhere, but we need to have the U.S. traveler.”

Sofitel is owned and operated by Solux, a subsidiary of Accor.

Using Accor’s asset-light approach, Sofitel prefers to growth through management contracts. But Gaymer-Jones said it will take on an ownership role when needed. He said the company has ownership stakes in 20% of its portfolio.

“If you're going to enter the New York market, you're going to have to put in some sort of investment,” he said. “Accor is our banker and from time to time, I can go in to our banker and ask for more money.”

The brand is attracting high net-worth individuals and consortiums as owners.

“We prefer to have owners who are not in it to flip the asset,” Gaymer-Jones said. “We want to have our owners in it for the long term.”

The typical management contract for a Sofitel property runs 15 years, the president said.

Using established brands as models
Sofitel executives looked at classic French labels such as Chanel, Louis Vuitton and Cartier to examine what gives the feel of being a true French company in the luxury space. Using that as a guide, Sofitel changed its logo to a unique link.

Beyond the core Sofitel properties, the brand has two labels for its hotels—Sofitel Legend, which are traditional, historical palaces around the world; and Sofitel So, which are contemporary blends of modernity and tradition, the president said.

It launched its first So hotel in Mauritius, an island nation off the southeast coast of the African continent. The second will open in Bangkok later this year. Mumbai and Sydney also are on the horizon, Gaymer-Jones said.

Sofitel is building its consumer awareness on three key pillars: design, gastronomy and culture.

Gaymer-Jones said the design element obviously is the most visible of the three.

“We literally give a blank canvas to our designers and say ‘go ahead and knock yourselves out,’” he said. “We’re giving them the opportunity to showcase their design, their feel and look in a hotel environment.”

Sofitel is working with high-profile designers, including:

  • Didier Gomez, who is designing two properties in Morocco and the Sofitel Paris le Faubourg;
  • Sybille de Margerie, who was the interior designer for The Grand Amsterdam and the Old Cataract in Aswan, Egypt; and
  • Kenzo Takada and Christian Lacroix, who were appointed artistic directors of the Sofitel So hotels in Mauritius and Bangkok.

Food and wine is an important part of the DNA of Sofitel as well, according to Gaymer-Jones. While the company wants to stress its French heritage, it does not require a French restaurant at each location because it wants guests to understand and appreciate the local culture of where the property is located.

The brand also is focusing on other offerings to attract luxury guests.

“Spas are really an important element of well being, so we want to make sure people feel the spa is something incredible,” said Gaymer-Jones, who explained that each spa will have a local feel rather than a brand-wide approach. For instance, the spa at the Sofitel St. James Hotel in London is a “tea spa,” he said.

“We try to create different spas in different parts of the world that are culturally in line with the region,” he said.

The repositioning of the brand has led to a different customer mix, according to Gaymer Jones.

“Before we were 75% to 80% business (guests),” he said. “Now we feel we have to have an individual leisure versus business approach.”

He said 38% of Sofitel’s guests are business individuals, 37% are leisure individuals and the remaining 25% represent group business and other guests.

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