After asset sale, Accor leans on tech to drive change
 
After asset sale, Accor leans on tech to drive change
26 NOVEMBER 2018 9:39 AM

AccorHotels is continuing its transformation from being asset-heavy to directly influencing how staff, guests and locals interact with hotels. The company's COO for Northern Europe, Thomas Dubaere, explains how technology is at the core of that change.

LONDON—It has been nine months since AccorHotels sold 55% of its owned hotel platform for €4.4 billion ($5 billion) through its HotelInvest division.

In May, the French hotel company said it increased that sales percentage to 57.8%, and then in July it sold another 7%, leaving it with just a little over one-third of the portfolio. That leaves an interesting question as to what AccorHotels has become and where it intends to go.

For Thomas Dubaere, COO, Northern Europe, AccorHotels, the company’s business model has shifted significantly as the separation of AccorInvest has concentrated its focus on providing hotel and travel services, rather than doubling up as an investor and an owner.

Those services have increased radically under the leadership of CEO Sébastien Bazin. Under his leadership, the company has acquired business stakes in concierge, catering, F&B, villa rental, reservations platforms and other offerings beyond brick-and-mortar properties.

Dubaere said AccorHotels’ recent experience and in-house expertise comes from being both an owner and a leading manager, which will allow its new services to be offered more widely to owners of AccorHotels brand flags, even to those outside the company.

“It is an interesting transition,” he said. “I would love to be on an industry panel where half of those on stage are managers or from management companies, the other half, brand owners, as I would love to be there as a representative of both. I believe they harmonize perfectly. The split of the company is based on expertise. We are great investors and great managers, but the mix of the two does not work anymore.”

AccorHotels will continue to innovate, Dubaere said.

“Booking.com, TripAdvisor, Airbnb; to quote our CEO, we have missed the first three wagons, but we will not miss the next two: customer relationship management and mobile payments,” he said. “We will do that while still being fully focused on operations and franchisors. It is a learning curve.”

He said success will come to hotel brand companies who have flexible expertise across a new range of offerings, services and disciplines. As the hotel industry becomes more complex, hotel owners are increasingly outsourcing developing disciplines such as digital marketing, data analysis, F&B and distribution, which Dubaere said firms such as AccorHotels are able to provide in-house and in a manner that is more aligned.

Under AccorHotels’ Augmented Hospitality platform, the company will be prioritizing such services as procurement, revenue management, design, concierge and digital services and F&B.

These changes derive from what Dubaere said are four major changes in the hotel industry, both in the U.K. and worldwide:

  • The digitalization process, which started 20 years ago, has had the largest impact, with the recent addition of customer management and data payments.
  • Overseas investors have increased their desire to invest in the U.K. but not organically.
  • Guests and consumers are looking more and more at augmented hospitality, which adds to their overall experience, even if they remain appreciative of traditional brands.
  • Employees want to be spontaneous and authentic, not pre-scripted.

Sometimes a helping hand
Due to the increased importance of these other disciplines, “top-line revenue is so complex it can no longer be managed by a standalone owner,” Dubaere said.

“We’ve been investing in and selling these additional services to existing partners for a year and a half now. For example, we’ve recruited a retail manager experienced purely in the retail business, and we’ve sold some of these concepts to our partners,” Dubaere said, who added AccorHotels has created 14 retail concepts.

“Revenue management is relatively easy to sell, but we’re happy to tie (owners) in for one year only, and based on numbers and market conditions, we can show the uplift we have, and if not, then they can get out,” Dubaere said.

Dubaere said he is conscious owners with larger portfolios have excellent management.

“We are not saying we will take all of the market,” Dubaere said.

For example, F&B is about listing all the expertise, design, conceptualization, mixology, procurement and menu engineering and then sharing what they believe the P&L will look like, he said.

“It is about a closer relationship and scalability. … In a third-party relationship the owner would miss out on a lot of the content,” Dubaere said.

The firm’s development of community services, known as Accor Local, will come to the U.K., but not yet, Dubaere said, with the program currently being tested in France.

“In France, it’s going well,” he said. “One thing is welcoming the community into our hotels, the second is our hotels and partners have a lot of empty spaces. One is radical, one is not.”

Staff reboot
Dubaere said this change at AccorHotels cannot happen unless there is a complete transformation in how employees interact with guests and locals.

“Take all computers away, and the administrational burden before (guests) get the key,” he said. “We have thrown away what we call the hotel script.”

Dubaere said technology’s role is to support and empower staff.

“We prefer to put people in front of guests,” he said. “A machine has no human touch. I have not seen a guest not like the human touch. The only reason guests will comment? That is the staff. No one has commented that they sat on a beautiful chair. Technology will aid us in this.”

Brand boosts
Dubaere noted that AccorHotels has also added brands both through in-house development and acquisitions, notably Fairmont, 25hours Hotels, Jo & Joe, Mantra and Mövenpick. In the United Kingdom, Dubaere is busy establishing AccorHotels as a major force. He also has recently added Scandinavia, Belgium, the Netherlands and Luxembourg to his remit.

“AccorHotels has split; we are now asset-light,” he said. “In the U.K., we have 240 hotels, 130 of which we manage, the other 110 we franchise. And going forwards, we will also become a major service provider. Outside of Europe, Accor was mostly asset-light, but in the U.K., we were asset-heavy forever.”

Dubaere said AccorHotels is still looking at U.K. growth and scale in the hotel brand space.

“Our ambition is not Whitbread or Travelodge; it is to lead in expertise,” Dubaere said of AccorHotels’ plans in the U.K. “Take the War Office in (Whitehall), London, where we’re bringing a Raffles. No other international brand got it, we did. We’re taking our place in luxury and running it, as did for management in the lifestyle segment.

“We did not just buy into the management of Fairmont just for luxury but for more than 100 years of pure luxury management. You do not welcome a Fairmont guest the same way as one to an Ibis.”

AccorHotels currently has 11 brands in the U.K., Dubaere said, and that MamaShelter, 25hours and Jo & Joe will join them, as will that Raffles hotel in 2021.

“In the U.K., more development, aiming at 300 (hotels) from 330,000 rooms up to 400,000, and the focus is not only on the number of hotels in the lifestyle area,” Dubaere said.

Many of AccorHotels’ acquisitions have been in the technology sector, Dubaere said. He added concierge service John Paul already is fully integrated.

“We will take technology further, but first the basics—customer care, loyalty. … Creating an entrepreneurial culture is key to making this strategy successful,” Dubaere said.

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