Article Summary: In a one-on-one conversation, AccorHotels and Expedia Group’s CEOs took the stage at IHIF to talk about transformation, disruptors and what their investors think.
In a one-on-one conversation, AccorHotels and Expedia Group’s CEOs took the stage at IHIF to talk about transformation, disruptors and what their investors think.
Primary Category: Brands
BERLIN—In a no-topics-off-the-table conversation at the International Hotel Investment Forum, AccorHotel’s Chairman and CEO Sébastien Bazin and Expedia Group President and CEO Mark Okerstrom discussed the similarities and differences of their businesses, how they spend their time, and why innovation is critical at any cost—no matter how they individually define it.
Here are some takeaways from the conversation.
Bazin and Okerstrom both are confident in their positioning
Both CEOs spoke of the work they have done to transform their companies. Bazin talked about Accor’s shift from asset-heavy to asset-light, the company’s many acquisitions over the past few years, and its most recent moves to strengthen its loyalty program and transform into “people-servicers.”
Okerstrom talked about the changes at Expedia he’s made, both in acquisitions and also in company clarification.
“Certainly one of the big changes I’ve made is to make a bigger deal of Expedia Group and think about it more as an integrated platform company, but all part of the same big family,” he said.
Both worry about what’s bigger than them …
Still, both have concerns about competition within the travel sphere.
“We are a $7-trillion market, and in that industry you have three categories of players,” Bazin said. “The first bucket are new-economy players like Expedia, Airbnb, Ctrip and so forth. Bucket 2 is the Marriotts, the Hiltons, the IHGs, the gorillas. Bucket 3 is the non-gorillas, the thousands of mom-and-pop (hotel) operators.”
“I’m spending two-thirds of my time trying to cope with bucket No. 1,” Bazin told Okerstrom, who in turn replied that his thinking is largely occupied by what’s even bigger than Expedia.
“Anytime someone stands on a higher or broader mountain than you do, you have to be careful,” Okerstrom said. “One of the fundamental reasons Expedia and Booking are growing very quickly is that they have a lot of what customers want. This year, we reached 1 million properties. … But I worry about Google. They don’t just have 1 million; they have everyone in the world. They have billions of customer eyeballs, doing searches and telling them exactly what they want and like.”
… and at the same time, both have their eyes on the little guys
Okerstrom said Expedia is “shifting more to smaller, independent properties” to add to the company’s listings.
Bazin said that group also is increasingly important for Accor. “Half my growth comes from (those small independent operators) because they knock on my door to gain protection,” he said.
Both believe innovation into the wider travel universe is key
Okerstrom acknowledged both companies are in the midst of transformation, and opened the conversation to what that means for them and their stakeholders.
“We’ve done much diversification in business accelerators—the small companies,” Bazin said. “I do it because I really believe it’s part of the future, but market cap-wise, my investors still don’t understand it. You’ve done the same. Are we right or wrong?”
“We’re totally right!” Okerstrom said in response, citing his company’s acquisitions of companies that he said “help building managers professionalize accommodations.”
“Our investors think these are interesting (acquisitions) because they ultimately are examples of us innovating,” he said. “It shows our investors that we’re thinking more broadly.”
Bazin said Accor’s investors take the opposite stance. “They understand it; they just don’t see the necessity to do it or they don’t see us having the expertise,” he said.
“I’m doing it for the exact same reasons you talked about,” he told Okerstrom. “It’s very simple in my mind—my job is to attract the new customer … then it is to convert them into the Accor ecosystem. Third is to retain them. I don’t want to lose that customer. That’s what I’m trying to build. This is what we’re going to be delivering, and it’s going to pay off.”
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Headline: Accor, Expedia CEOs discuss shared concerns, direction
Article Date: 3/12/2019
Article Time: 9:18:00 AM