Few industries are as vulnerable to a global recession as hotels and hospitality, especially when it comes to the luxury end of the market. Holidays tend to be one of the first victims of cuts when families start to feel the pinch. The same is true with companies, which tend to look for cheaper places for their employees to stay during times of austerity, or skip business trips altogether.
This is something that Yann Caillère, Accor’s president and chief operating officer, is acutely aware of. Being complacent has no place in this business, and he runs his company accordingly. Accor, as he explains it, is no longer a traditional hotel and accommodation company.
Mr Caillère says: “I don’t know if you have noticed, but the hotel industry has changed a lot over the years, and so have we. And it is probably going to change even more in the coming years. Before, we were just a hotel company. And now we’re basically doing about five jobs.”
Mr Caillère is succinct and direct. There is no entourage around him, no quote checking and no long-winded answers. He matter-of-factly explains his company’s strategy as covering the key jobs he refers to. The first area is the creation of new brands and the upgrading of existing ones. Two years ago, the company launched its business traveller-oriented Pullman chain of hotels and budget brand All Seasons.
There is also an asset management element to the strategy, with Accor now involved not just in managing the hotels but in their ownership, renovation, sale and construction. Mr Caillère says this has helped the company diversify its activities and made it less reliant on one area.
Distribution and operations have also changed, with franchising only one part of its business. The company now directly owns more of its rooms than any of its rivals. Altogether, he says its hotels are 24% franchised and 22% under direct management, with the remainder under various lease structures.
Part of this strategy will undoubtedly be foreign expansion, of which Mr Caillère identifies several countries he has his eye on and where he thinks there is likely to be interest from the wider hotel industry. The interview took place at the ADIT Invest 2011 conference in Fortaleza, Brazil, and unsurprisingly he is keen for Accor to expand there. Similarly, he sees a number of possibilities for new hotels in India and China, but leaves out fellow BRIC country Russia.
He says: “To make a long story short, we have to optimise our existing assets, and we can expand either by zone or by brand. What we need to do is continue to grow at a normal pace and keep the leadership position.
"The second part of it is where do we have to push for growth? Latin America is part of that, with Brazil the leading country. There’s India, China, the rest of Asia and Australia. Then there are more countries in Africa, such as Morocco and Algeria, and possibly Saudi Arabia where we can push more aggressively.
"And in terms of brand, we have launched new brands and we have brands such as Pullman and All Seasons, which are very promising, and we are pushing like hell on those. This is where I’d say the future of Accor is.”