Joining Minor Hotels from Accor as chief commercial officer, Ian Di Tullio’s appointment reflects Minor’s growth ambitions and, along with it, the need to evolve its commercial strategy
Congrats on your new role at Minor Hotels. Has it been two months?
Yes, but it feels a lot longer as things move very fast, which is lovely. At the same time, it’s been wonderful to land in Bangkok. Of all my expat experiences so far in relocating, Bangkok is by far the most welcoming and the softest of landings.
Is this your first posting in Asia?
I’ve had offices in northern China, and in a variety of different countries in Asia, but this is my first time actually living here (in Asia). I’ve been dying to live here for the longest time. Somehow, it took me 10 years to make it happen.
It must be quite different, from Europe to Asia, and from Accor to Minor.
Super different. I’ve been lucky to have lived the extremes early on in my life. I started in North America, which has an open, collaborative and American-driven culture. Then I went to the Middle East which is a bit more command and control, older school management. If you can operate in those two realms, adjusting to the rest of the world is quite easy. You deal with cultural differences, of course, as you do anywhere else.
Every company has its own culture and DNA. Accor was five incredible years of my life. I hold Sebastien (Bazin) and the team there with an incredibly high regard; they’ve done a great deal to transform the industry and taken brands and lifestyle to the next level. The Minor opportunity was a hard decision, but life is about making the best professional and personal choices.
When Dillip (Rajakarier) and Bill (Heinecke) reached out, I immediately had this deep connection with them, because they are an incredibly engaged duo as it pertains to our business – they live and breathe hospitality in a way that is unusual with people at that level; they have an enormous appetite and ambition for growth, and they really want the business to succeed.
Minor has become major, with more than 530 open hotels, going on to 600 by 2025. Do you see a need for its commercial strategy to evolve?
There is a desire for evolution. The base of the company is solid. We have strong global brands across key continents to our industry, namely Europe, Asia and Australia/New Zealand. We also have strong leaders in each of those areas driving the P&L’s. Lastly, there’s Bill’s and Dillip’s roadmap for growth, which is the driving force behind Minor.
So how are we going to leverage on the foundation? Do we have the right brand portfolio? We have eight brands today, going on to nine, while our competitors have anywhere from 20 to 40-plus brands. We probably do need more brands. One of our top priorities is to establish our brand portfolio and brand strategy which allow us then to accelerate our development plan.
Another priority is creating a global commercial leadership team. We do operate as a global company but we are also independent in our individual delivery of the strategy for each continent.
A third priority, beyond elements like brand and people, is around digital, distribution and loyalty. Once you start hitting 500 to 600 hotels, having control over your distribution is increasingly important, particularly in the upscale and luxury spaces that we’re in.
We need to own our customer and the digital space much more aggressively – and we need to distribute all of our brands in a more seamless fashion.
Digital is a fundamental element of the value proposition of the experience. We have to offer our customers a digital experience that absolutely aligns with the brand. Once they start travelling between Europe and Asia and cross shopping, we need to remove the friction, allowing them to accrue benefits and points and all of those things across the network.
It’s not a secret that I was the engine behind Accor Live Limitless, a transformation with the intent of bringing distribution, loyalty and digital into the next decade of competition. So, I’d be remiss if I said this would not be a priority for Minor.
But, the Accor’s of this world have the scale that affords them the means to compete on digital.
Ultimately, we all have limited means. So the reality is that we have to get better at how we deploy our resources, how we find more efficient ways to do what we did yesterday, how we redefine the way we do personalisation. No one has millions of dollars to throw at personalisation, CRM and those kinds of things. This is where artificial intelligence is helpful. A lot of people talk about AI as if it acts in isolation. In many cases, AI is increasingly a part of the products we deal with today. Salesforce, for example, has embedded AI in its solutions, which allows companies to do personalisation on the fly with their data.
Speaking of loyalty, Minor is part of Global Hotel Alliance (GHA). Do you see a future in which Minor would go it alone as it grows bigger?
It’s an interesting question. We have a significant stake in GHA so we are not considering today to jump off the boat and do our own thing. The programme has just launched Discovery Dollars, which is a fundamental change from an alliance model to a loyalty programme model. I fundamentally believe that a loyalty programme needs to be liquid; its goal should be that its currency can be utilised fairly rapidly – that’s what Discovery Dollars allows us to do.
GHA has a good representation globally in membership and brands. For smaller operators in the upscale/luxury space, it is increasingly recognised as an alternative to other programmes that offer an assortment of brands that go from midscale oftentimes to luxury, which are not as focused as we are.
So I would say no plans to go it alone. Key brands, liquidity of programme and lower fees for hotels relative to other programmes are GHA’s strengths. As we all know, loyalty fees for franchise or management can be a financial hurdle in the minds of some owners, even though it’s of high value.
What are your thoughts on the China market? It’s said to be entering an era of much slower economic growth, nearly akin to Japan’s lost decade.
The outbound flows from China are not back to normal as we all know. They’ve increased since the beginning of the year, but will they be back 100 per cent by the end of the year? Probably not. Asia is a bit more exposed to it because of the proximity, so Asia’s recovery post-Covid has been slightly more complicated (than Europe or the US). But I’ve seen countries, such as Israel and India that are unexpectedly contributing significant amounts to the bounce back in several of our properties.
That said, even though China’s GDP as a whole might not be growing, we can’t forget that 90 per cent of the growth of the middle class in the next 10 years will be in China and India. The capacity of people to spend in those two economies will grow. If economic growth worldwide moderates, I still believe our industry’s growth will be much higher than GDP growth. People are over-allocating their expenditures on experiences and travel. We’ve seen that (post-Covid). So, we’re super lucky as a sector.
What are your thoughts on Europe, which contributes as much as 70 per cent of Minor’s revenues and is where 61 per cent of the portfolio is? Will it continue to do well?
Europe is in a privileged position as it gets a disproportionate amount of the outbound US flights. A lot of Europe’s performance is being buoyed by the weak Euro against the US dollar, which creates a centre for American travellers to travel to Europe.
For Europeans, cost of flights are high and interest rates are high, but they have an amazing backyard, which creates an incredible amount of intra-European travel. With these flows, and additional volume as China starts to return, hotels are able to price their ADRs higher.
Last question, what is the most fun part of your job?
One of the greatest things about any job is learning, and coming here is a whole new learning experience for me – new language, culture, market, etc, so every day I’m learning something new. The flip side is I also get to use my decades of experience – which makes me sound terribly old – to coach and bring some technical and hard and soft skills to bear, which is rewarding. It’s rare that your brain can fire on all cylinders every day, but mine does and I sleep incredibly well at night.