AccorHotels’ Sébastien Bazin targets global—and eclectic—growth
Sébastien Bazin was only six years old when a pair of French friends and business buddies— reportedly inspired by the success of the side-of-the-road and suburban lodging steamrolling across the landscape of 1960s America—began crafting a hotel company in France that would reflect that ethos and, ultimately, play a significant role in the grade-schooler’s life.
The year was 1967 and entrepreneurs Paul Dubrule and Gérard Pélisson were geared up to launch their initial property in northern France. Dubbed Novotel (melding the Latin word for new with hotel), the hotel dans le style américain opened outside of Lille, planting the single seed that would germinate into a full-blown global “garden” of more than 4,200 hotels, resorts and residences known today as AccorHotels, and a wealth of strategic, complementary businesses that over the past several years have been rapidly increasing.
And, interestingly enough, it’s that six-year-old—albeit a half-century later—that’s been calling the rapid-fire shots, transforming the company Dubrule and Pélisson originated as SIEH (Société d’investissement et d’exploitation hôteliers) so long ago.
“The world is changing before our eyes and along [with that]arises a wealth of opportunities,” observed Bazin, who has been at the helm of AccorHotels as chairman/CEO since 2013. “Today, a hotel is about more than just a stay: It’s about new services, new ways to offer personalized experiences and unique emotions, always with the exceptional standards of hospitality that guests have come to expect from AccorHotels. In short, our guests are looking for augmented hospitality.”
Augmentation might just be the name of the game for AccorHotels; it’s an aspect embedded by its co-founders, who saw the benefits of adding complementary businesses—restaurants, tour operators, voucher programs, spas—to its lodging enterprise on a consistent basis over the years.
There have been many milestones in the company’s 50-year history—one has only to look at the accompanying sidebar to see their breadth. But that glance also will show how much activity has transpired since Bazin entered the C-suite at the firm’s Paris headquarters, leading some industry observers to wonder if AccorHotels could be considered the Amazon.com of hospitality.
While there’s no knowing if Bazin likens himself to Amazon CEO Jeff Bezos, there’s no getting away from the executives’ similarity of appetite for finding the next best thing that will enhance their company and its customers’ experiences.
“We have started making our hotels even more customer-centric and focused on the guest experience. We have invested in businesses and brands that can bring innovative extra services to the group and to our guests,” said the CEO.
AccorHotels currently has more than 20 hotel brands, including luxury level Raffles, Sofitel Legend, Fairmont, SO Sofitel, Sofitel, Banyan Tree, Angsana, Rixos, MGallery by Sofitel, Pullman, Swissôtel and 25hours Hotels; midscale and boutique brands Novotel, Mercure, Mama Shelter and Adagio; and economy brands Jo&Joe, Ibis, Ibis Styles, Ibis budget and the regional brands Grand Mercure, The Sebel and HotelF1.
It also has adjunct “hospitality experiences” that include private rentals (onefinestay, Travel Keys, Squarebreak), concierge services (John Paul), dining and events services (Potel et Chabot, Groupe Noctis), and digital platforms (Fastbooking, Availpro, VeryChic) connected to luxury and upscale lodging, apartments and services.
“We are bringing our new partners, their visions and skills into the AccorHotels universe to create exciting synergies with our core business, in the aim of being the world’s hospitality leader,” said Bazin.
With the CEO calling the tune, many of the new dance partners have come on the floor only in the past four years. For example, in 2014 Accor and Huazhu (China Lodging) formed an alliance, creating a major presence in China, where Accor has been for many years. It also acquired a roughly 35% stake in boutique brand Mama Shelter.
On Bazin’s watch, the following year, in addition to changing the company name to AccorHotels, the company took over Fastbooking, a digital services specialist for the hospitality industry, which the CEO said would “help speed up the implementation of our digital strategy.”
Likely understanding the power of involvement, Bazin kept the company profile high in the national mix, partnering in the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change held in France, as well as in the HeForShe movement to promote gender equality. AccorHotels also inked a 10-year naming rights agreement for the Bercy Arena in Paris.
Then, toward the end of the year, the global hospitality group said it would transform its Sofitel Miami into the Pullman Miami Airport, a foray into North America for the brand and perhaps a signal to U.S. hotel industry movers and shakers.
It was in 2016, however, that the buzz around Bazin and his penchant for not sitting still began getting louder as more deals got done, interesting partners were added, and innovation within the company’s core competency—hotels—rose higher. It also proved to be a record year for growth.
Among the eye-openers were AccorHotels’ acquisition of FRHI Holdings Ltd. and its signature brands—Fairmont, Raffles and Swissôtel, for close to $3 billion. The move delivered 154 luxury and upper-upscale hotels and resorts, including 40 under development, representing an aggregate 56,000 rooms.
Bazin termed the acquisition of the brands “a historical milestone for AccorHotels,” noting it would “open up amazing growth prospects, lift our international presence to unprecedented heights and build value over the long term.”
The acquisition and investment spree rolled on through the year, with AccorHotels embracing the sharing economy with a 49% stake in the Squarebreak digital platform for upscale villas in France and a 28% stake in Oasis Collections’ digital platform that offers apartments and services. It went on to acquire onefinestay, which offers luxury serviced homes for rent and acquired a 79% stake in concierge-services leader John Paul. It acquired a 30% stake in lifestyle brand 25hours Hotels and also partnered with Singapore-based Banyan Tree to develop and manage Banyan-Tree-branded hotels around the world, with Banyan Tree gaining access to AccorHotels’ global reservations and sales network, as well as its loyalty program, Le Club AccorHotels.
Amid all this activity, it also introduced Jo&Joe, a hotel brand specifically designed for millennials.
“Hotels are more than ever at the heart of everything we do,” Bazin emphasized. “Our role is to provide hospitality expertise to all segments of the market, from luxury to economy, Raffles to HotelF1. In this respect, the reinforcement of our distinctive portfolio with the purchase of FRHI and the launch of new brand Jo&Joe, for instance, testifies to our continuing commitment.”
In what he termed a “challenging environment,” Bazin felt the company posted “an excellent performance” for the year.
After opening a record 347 hotels (representing 81,042 rooms) in 2016, the momentum continued into 2017, with development corresponding to 34,000 additional rooms (188 hotels) in the first three quarters of the year.
“AccorHotels’ results for first-half 2017 were particularly solid,” said Bazin. “They reflect growth in our hotel business, the rapid integration of recently acquired brands, our persistently dynamic development and the ramp-up of our new businesses. In this way, we are increasing our market share and consolidating our global leadership while profoundly transforming our business model.
“AccorHotels delivered another robust performance in the third quarter,” observed the CEO. “The positive operating trends observed in our key markets in the first half were confirmed… In the course of the quarter, our hotel base crossed the symbolic mark of 600,000 rooms and our pipeline reached a record level, reflecting the increasingly strong attractiveness of our brand portfolio.”
At the end of September (latest figures available), the company’s pipeline comprised 992 hotels representing 178,000 rooms with organic development expected to exceed 40,000 rooms in 2017, which would be a record performance.
Last year, the portfolio bulged with activity similar to 2016, keeping Bazin’s vision for expansion, particularly with “augmented hospitality,” on track.
The company integrated Travel Keys, Squarebreak and onefinestay under the onefinestay brand, aggregating more than 10,000 homes globally with professional hospitality and concierge services.
Further investment included a 40% stake in Potel et Chabot, a French firm known for prestige event services, and a 31% stake in Groupe Noctis, which specializes in events, catering and entertainment.
“We’re very excited about teaming up with Groupe Noctis, which has come to rank among the leaders in a fiercely competitive environment in only a few years,” said Bazin. “It’s more than an enviable address book: [Chairman, CEO and founder] Laurent de Gourcuff and his teams have built a portfolio of distinctive venues with strong characters that are promoting Paris on the international scene. This alliance blends naturally into our plans to transform and boost AccorHotels with a view to catering to increasingly discerning customers’ wants and needs beyond the travel universe. Its expertise and ours complement each other, and pooling our assets will put us in a position to tap into growth opportunities and synergies in France and beyond.”
Continuing its acquisition tactic, AccorHotels picked up VeryChic, a digital platform for the private sale of luxury hotel rooms and apartments, cruises and packages that offers, via its website and mobile application, more than 4,000 exclusive private sales throughout the year to some five million members.
It also acquired Availpro, a software and digital services provider for the European independent hotel industry.
Adding more online power, the company launched MoodMatch, a search engine for travel experiences that utilizes technology developed by Travelsify. Initially targeting internet users in France and the United Kingdom, Travelsify identified the DNA of some thousand hotels from AccorHotels’ brands or independent hotels on AccorHotels.com, based on the analysis of all guest and expert comments posted about them online.
Potential guests are given a choice from four categories: in the mood for, preferred style, close to and anything else? The search engine then displays a selection of hotels with the match percentage between the moods chosen by the user and the DNA of the corresponding hotel, creating a potentially ideal match.
In Q3, AccorHotels looked to add another complementary service, inking an agreement to acquire Gekko, a specialist in hotel search and reservation solutions for business travelers, with an interface connected to more than 500,000 hotels worldwide, ranging from budget to luxury.
Perhaps moving more outside the box than with some of the other augmented hospitality players, AccorHotels partnered in a 50/50 joint venture with Bouygues Immobilier, the real estate development subsidiary of Bouygues Group, for the accelerated development of Nextdoor, a collaborative workspaces model.
Bouygues Immobilier is utilizing its knowledge of developments in business property, site selection, real estate negotiations and urban engineering usage, as well as its relationships with key accounts and landlords, while AccorHotels is contributing its expertise in customer relations, hospitality and concierge services, as well as site operations in France and internationally. The JV aims to create 80 Nextdoor workspaces by 2022.
And, in a realm of its own, is thecamp, of which AccorHotels is a founder and a venture well-aligned with Bazin’s view of the future.
Opened in October in Aix-en-Provence, thecamp is billed as “a unique campus dedicated to inspiration, training, innovation and experimentation, bringing together public partners, sector-leading companies, start-ups, students and artists from all over the world…to help individuals and organizations to become change-makers.”
The company is helping create thecamp’s educational content, providing an opportunity to offer its employees “inspiring trainings in a third place [that]facilitates disruption.”
Bazin’s push for more hotels didn’t go unheeded either last year, with a series of deals that added to its scope internationally.
AccorHotels and Turkey-based Rixos Hotels formed a JV to develop and manage Rixos-branded hotels and resorts worldwide, with AccorHotels integrating in its network 15 hotels located in resort markets in Turkey, UAE, Egypt, Russia and Europe. As part of the deal, Rixos will reflag five city-center hotels to AccorHotels brands that will be managed by AccorHotels, and will add hotels in Dubai, Abu Dhabi and the Maldives.
“This new partnership has many benefits for us,” said Bazin. “It enables us to become a leading resort operator in a growing market and to complement our offer with attractive leisure destinations to our guests and loyalty members. Moreover, we are going a step further in our ambition to be the best provider of multi-nature services to guests by operating hotels in major entertainment complexes, which offers new opportunities both in terms of customer experience and development strategy.”
In South America, the company amped up its presence with the integration of 26 hotels from BHG (Brazil Hospitality Group) that it will manage.
The properties will be renovated and reflagged over the next two years across a variety of AccorHotels’ brands, including Ibis, Ibis Styles, Ibis Budget, Mama Shelter, MGallery, Mercure, Novotel and Pullman.
Citing Brazil today as a land of opportunities, Bazin considers this transaction “a new milestone in the history of AccorHotels in this country, where we have been a firm leader for decades. It will bring new landmark hotels as well as an increased brand awareness across all segments.”
Another major move last year was the inking of an agreement to acquire Australia-based Mantra Group Ltd., which has more than 125 properties representing 20,000 rooms in hotels, resorts and serviced apartments in Australia, New Zealand, Indonesia and Hawaii across three brands (Mantra, Peppers and Breakfree).
At almost the same time, AccorHotels, partnered with Orient Express owner SNCF Group to globally advance the luxury brand known for its iconic trains with a new collection of hotels under the OE banner, and garnering a 50% stake in the company.
Bazin indicated he was “delighted” with the strategic partnership, noting it “cements the alliance of two major French players in the world of travel for a shared purpose—that of giving fresh impetus and international standing to a historic and world-renowned brand.”
And, as part of a planned brand relaunch, AccorHotels sold 62 HotelF1 assets to SNI Group (Société Nationale Immobilière-Caisse des dépôts et Consignations group), with plans to become the majority shareholder of the structure holding the remaining 102 HotelF1 assets.
Closing out the year, the company signed a management agreement with Dubai-based master developer Nakheel for PALM360, a two-tower development composed of the 125-key Raffles The Palm Dubai Hotel and 359-unit Raffles Residences PALM360 on the Palm Jumeirah.
“Our acquisitions in the lifestyle, luxury, private rentals, dining and event, and premium concierge-service sectors reflect our desire to expand the AccorHotels ecosystem of services,” stressed Bazin. “Because our conviction is that private rentals are an opportunity and a natural extension of our core skills, we invested in onefinestay, Travel Keys and Squarebreak, which offer premium locations with dedicated services. The upscale event-management and catering sector, home to recent investments into Potel et Chabot and Noctis, continues this wider vision of hospitality. This is also why we welcomed leading concierge provider John Paul into the AccorHotels family: Beyond its steady growth potential, the personalized-services market also fits into our overall vision. In short, we want to take the idea of hospitality where it has never gone before, so we are expanding into augmented hospitality services and solutions dedicated to our owners, partners, guests and employees.”
While the whirlwind of all the wheeling and dealing and reaching for new opportunities might make some high-level heads spin, it’s a pace Bazin has apparently come to terms with, if not fostered.
The executive built his career starting out in finance, working in New York, San Francisco and London. In 1990, he was tapped to be CEO of Hottinguer Rivaud Finances, an investment bank, and two years later, made a lateral move to L’Immobilière Hôtelière, a hotel developer in France.
In 1997, he moved to Colony Capital, a private real estate investment firm, to head up its European branch and led several acquisitions, principally in the hospitality sector that, interestingly enough, included Club Méditerranée, Fairmont and Raffles, as well as Générale des Eaux, Lucien Barrière, Buffalo Grill, Château Lascombes and Stadia Consulting, among others.
While at Colony Capital, he joined Accor’s board of directors in 2005, before resigning eight years later when he was named chairman/CEO of AccorHotels.
And lest anyone think the executive might slow down in 2018, there’s already a half-dozen hotel openings on the books, including Raffles Warsaw in Poland, SO Sofitel Auckland in New Zealand, Swissôtel Sarajevo in Bosnia and Herzegovina, Pullman Luang Prabang in Laos, Pullman Mandalay Mingalar in Myanmar and Pullman Tokyo Tamachi.
In North America, the 37-story, 1,048-key Fairmont Austin is slated to open in Texas this year. Next year, the iconic Century Plaza Hotel, which is currently undergoing restoration, is slated to reopen as the Fairmont Century Plaza, Los Angeles, with 394 guestrooms and 63 branded residences. The hotel is part of a roughly $2.5-billion mixed-use redevelopment.
Also ready to debut over the next two years are Sofitel Mexico Reforma, Mexico City; Fairmont Costa Canuva, Riviera Nayarit, Mexico; and the Fairmont Saint Lucia at Sunset Bay, Saint Lucia.
“This is the new AccorHotels, a group pioneering augmented hospitality,” said Bazin. “A group dedicated to bringing new services to our guests and our neighbors, to travelers and local communities while never forgetting the core values that underpin everything we do. Through our wide range of brands, we will continue to deliver great hospitality services and singular experiences to guests. As true ‘Heartists,’ our employees—[who]are the living heart of the group— will continue to be attentive to guests’ needs and desires and to bring them the best of the AccorHotels know-how whenever and wherever they need it.
“AccorHotels’ vision of the hospitality of tomorrow begins by making it the hospitality of today,” added the CEO. “And it starts every day by living up to the promise of our group’s motto: to always make you ‘Feel Welcome.’” HB