AccorHotels CEO Sébastien Bazin spoke candidly in a video interview with Hotel News Now on why the company has been embracing change and growth at such a breakneck pace.
Editor's note: Click here for the full transcript of Hotel News Now’s interview with AccorHotels CEO Sébastien Bazin, and click here for part two of the story, in which Bazin outlines AccorHotels' strategy in some of its recent moves.
BUENOS AIRES, Argentina—To stay ahead of change in the global hotel industry, risks are mandatory.
That was the big message from AccorHotels CEO Sébastien Bazin during an on-stage interview with Hotel News Now at the recent South America Hotel Investment Conference.
“In today’s world, either you change or you will be changed,” he said. “So either you act and then you make some hard decisions and take some risk … (or) somebody is going to be acting for you—that’s somebody called Booking.com, Expedia, Airbnb, Google, Amazon, Facebook.”
In part one of HNN’s interview with Bazin, he addressed today’s changing customer, why legacy hotel companies often are slow to move in response to change, and how he and his company are dealing with disruptors.
The pace of industry change
For the Paris-based AccorHotels, 2015 launched a deal-making streak, with its $2.9-billion acquisition of FRHI Holdings Limited and its Fairmont, Raffles and Swissôtel brands. That acquisition pace picked up speed in 2016 with its full or partial acquisitions of several companies, including private accommodations provider Oasis Collections, luxury serviced-homes provider Onefinestay, concierge firm John Paul and more.
- Click here for a chronology of these and other AccorHotels deals since Bazin took over as CEO.
Along the way, the company launched its 20th brand, Jo&Joe, and acquired ownership stakes in hotel brands 25hours, Banyan Tree and Rixos Hotels, among others.
Since the SAHIC interview, AccorHotels has signed an agreement to buy hotel search and reservation software system Gekko in a transaction valued at €100 million ($118.1 million), and acquired a 50% stake in the share capital of the Orient Express train brand, with a goal of developing an Orient Express hotel brand. Earlier this week, it announced a proposed bid to acquire Australia’s Mantra Group.
Bazin explained why he has directed the company to make such diverse moves in a relatively short amount of time, and why “standing still is not an option:”
Today’s fast-paced environment fits in well with Bazin’s personal style.
“I’ve been a fast-actor for 25 years, and I love anything when you have speed,” he said. “My speed is probably too fast if you ask the majority of Accor employees. Do I believe I am going fast enough? No.”
His fear of missing out is partly due to what he calls “the good news” of operating within a healthy, growing industry, because that health invites a lot of disruptors looking to join the party.
“Because (the) industry has gross capacity, size, scale and opportunities, it means it’s one of the first industries where you’ve been facing so much mutation over the past 15 years,” he said, citing entry of not only online travel agencies, but Airbnb, artificial intelligence, mobile payment and other disruptors.
“They’re just invading a growing industry in which they feel comfortable,” he said.
Part of AccorHotels’ strategy under Bazin’s leadership has been to embrace—rather than treat as enemies—those sharing-economy accommodations platforms, which is evident in the company’s recent acquisitions.
In making business plays for private-residence providers, the end game is serving—and retaining—customers by giving them different options for different stays, he said.
“Why can’t I offer you what you want? I am the interface,” Bazin said, giving voice to the network of private accommodations listed on AccorHotels’ website. “You have been with me in my hotels … you want to have access to a spa; you want to have the linens; you want to have the amenities … I can provide that for you. Airbnb cannot.”
Even when guests spend some of their trips in non-traditional hotel accommodations, they’re still his clients, he said.
“I don’t care because at least I retained that relationship with you, and then I know you better and I can serve you better,” he said.
If the first waves of disruption came from OTAs and companies like Airbnb, the next are on the horizon, driven largely by technology, Bazin said.
Today’s changing customer
“The behavior of our client today is vastly different than the behaviors of the same client 20 years ago,” Bazin said.
While capturing and using data on guests is critical, the best differentiator today is for hotels to be able to provide a transformational experience, he said.