Sam Ballard learns how the hospitality giant is coupling decades of experience with a start-up mentality to disrupt customer-centric travel
With 4,300 hotels in 100 countries across 32 brands, AccorHotels is, by anyone’s standards, a hospitality giant. The firm, which was founded in 1967, is relatively young compared to its major competitors (Marriott was founded in 1927 and Hilton in 1919) – however, in recent years the company has taken that youth and steered itself in a bold new direction.
In 2016, AccorHotels’ management made the decision to become an “asset-light business”. Fundamentally, this meant selling off a majority of its large portfolio of properties, which are now either operated under management or franchise agreements with AccorHotels and retain their brand flags. The billions raised will help accelerate the company’s growth into exciting new areas, where it has developed three clearly defined verticals in which the company now operates: hotels, private-home-sharing platforms and new businesses.
AccorHotels has already acquired luxury hotel brands such as Fairmont, Raffles and Swissôtel, not to mention the €630 million worth of travel start-ups it has bought into in the past four years alone, such as luxury private rental firm onefinestay and Jean Paul, a concierge service provider. They were even considering taking a minority stake in Air France-KLM – one of Europe’s biggest airlines. For all intents and purposes, AccorHotels is adopting the mindset of a start-up business with the backing of a multibillion-dollar company.
“Start-ups have a very different mentality,” says Thomas Dubaere, managing director of the AccorHotels UK and Ireland operation. “They are innovative, creative, and it’s all about trying and doing.
“When we started with the online travel agents, we wondered what was next and then came Trivago and TripAdvisor. After that? Airbnb and Uber. What’s the next one going to be? The next generation keeps reinventing itself.”
Much of AccorHotels’ strategy comes down to the company not wanting to be caught napping when that next trend does come along. Dubaere predicts that the next hospitality disrupter will be rooted in bettering the overall customer experience. When pushed on specifics, he says data and mobile payments are the big areas to watch out for.
“We’re getting behind the start-ups because they have another way of looking at the experience in general,” he explains. “I’ll give you an example: about eight years ago a very good competitor of ours decided to invest in a new welcome experience that meant guests could check themselves in and out. It was innovative. But we used a start-up mentality for our solution. When you arrive at one of our hotels now there is no check-in desk. Instead, there is a member of staff with a mobile phone who will check you in within five seconds – or half a minute if you have questions.
“We have invested in great technology and then taken it away from the customer to personalise the service.”
It was a similar move that made AccorHotels buy the luxury home-sharing platform onefinestay for £117 million in 2016. The hospitality giant has also got either major or controlling stakes in Squarebreak, a home-sharing platform in France; and Travel Keys, a company that specialises in renting luxury villas around the world.
For Dubaere, being able to offer a luxury apartment on onefinestay means product diversification for his well-heeled customers. Put simply: if a customer’s favourite room in the Sofitel or Savoy is unavailable, they can stay in a luxury apartment instead. Also, while AccorHotels’ loyalty scheme doesn’t stretch to cover the home-sharing platforms yet, Dubaere hinted that it won’t be long until this is rectified.
Every time AccorHotels picks up a new brand it fundamentally alters the way in which the business operates. The plan, with any acquisition, is to not just pick up a brand name, but gather all of the years of experience that goes along with that. In the case of luxury hotels that could be years of heritage. With start-ups, it’s the fresh thinking that comes from being a disrupter.
Take Mama Shelter, which was founded by the ex-owners of Club Med. The concept, according to Dubaere, is to create an incredible restaurant, anchored around an amazing social space, and then construct hotel rooms on top. “We are used to building a hotel and adding a restaurant,” he says. “It’s a totally different way of looking at it.”
The conceptual change is symptomatic of a number of decisions AccorHotels has taken across its brands regarding public spaces. The ground floor of the ibis hotel in Cambridge is now a coffee shop where 80 per cent of revenues are generated from people not staying in the hotel.
Today, the company has four coffee shops, five bars and two hamburger restaurants, which are pioneered by a new retail chief.
The Novotel in Canary Wharf is another example, Dubaere says. Previously they would have added a restaurant to the ground floor. Instead, Bokan is perched on top of the 39-floor hotel – offering excellent views and boasting the accolade of being London’s highest gin bar. “It is a destination in itself,” says Dubaere.
He explains: “We want to be innovative. To use the technology to create new experiences and daring to invest in new businesses. Whatever experiences those companies have we will incorporate them into our brands.
“Will that affect our DNA? Yes. Not fully, but yes. Our core business is still our 32 brands. We will continue to invest and, if you were to ask me if we were to have more brands in the future, then I would say very possibly.”