ACCOR celebrates 30 years in Asia-Pacific today by announcing 100 contracts signed this year and 700 hotels in operation in the region by 2015, but chairman and CEO Denis Hennequin said it was not a numbers game.
“It is not chasing numbers for the financial community but to answer to increased demand as a result of the booming economy here and in other parts of the world,” said Hennequin, when asked if the chain’s first priority was to increase shareholder value by opening hotels as fast as McDonald’s could open restaurants.
“We have a pipeline of 110,000 rooms within the next three years. Fifty per cent is in Asia-Pacific because Asia-Pacific is the vibrant part of the world today,” said Hennequin, who rose to fame for his feat in expanding McDonald’s in gourmet haven France and in Europe before joining Accor as CEO in January 2011.
Hennequin also refutes that Accor was stretching its brand elasticity as a means to get more contracts. The Ibis brand, for example, has been segmented into Ibis, Ibis Styles and Ibis Budget, while there is also now a Suite Novotel sub-brand.
“We’re bringing clarity to our offers. In the economy segment, you’ve got the budget segment and the upscale version of the budget segment, just like airlines with their low-cost and economy. Ibis Budget is the budget segment of our economy offer, while Ibis Styles is a freestyle exercise around economy. There are lots of independent, good economy hotels but they are not exactly the room size or design of a traditional Ibis. So with Ibis Styles, we can bring them into the family. They keep to their own style and identity but the fundamentals of economy are the same – price predictability, comfort, quality and distribution.”
He said if owners were not satisfied with what Accor brought to the party as operator, its pipeline would vanish. “On the contrary, it is accelerating,” he said, in an interview this morning with TTG Asia.
Accor’s growth in the region, particularly in the last five years, has been nothing short of spectacular. From one hotel in Asia-Pacific in 1982, it grew to 13 hotels in 1990, 180 in 2000 and 422 in 2010. This year, a record 110 openings brings the number of Accor hotels in Asia-Pacific to 550.
Starwood Hotels & Resorts will have 320 hotels in Asia by 2014 (as of September 20, 2012), while Marriott International is aiming for at least 265 hotels by 2016 (as of October 31, 2012), to name two comparisons.
Accor’s critics question how 110 hotels could be opened in a year without owners’ ROI, brand integrity and operation fraying around the edges, particularly when the industry is facing a critical shortage of staff. Accor Asia-Pacific chairman and CEO, Michael Issenberg, said: “It is challenging, but it is what we do.
“Over the years, we’ve developed the systems and the capability to do large-scale growth. Take our academies for instance – there was only one academy for Asia-Pacific, then one Pacific, one Asia. Now, we have academies in China, Thailand, Indonesia and India.”
Issenberg does not expect Accor’s growth in Asia-Pacific to taper off. The 100 hotels signed this year include 48 hotels in Australia/New Zealand from Accor’s acquisition of Mirvac, a hotel management company. The 100th contract was Novotel Goa Shrem Resort.
“I’d be disappointed if we won’t be able to replicate this year and sign 60-70 hotels next year,” he said.
Hennequin said Asia-Pacific now contributed 12 per cent to Accor’s revenues (80 per cent is management/franchise fees).
“That’s coming from just three per cent in 2008. There’s potential to double that in the next four years,” he said.
– Read the full interview in TTG Asia, January 11, 2013
