French hotel giant AccorHotels has continually surprised us since its latest CEO, Sébastien Bazin, began occupying the big seat in 2013.
Its list of curve balls has included:
- Reversing its, and everyone else’s, asset-light strategy in November 2013;
- moving into the design-oriented lifestyle category by acquiring a minority stake in Mama Shelter in October 2014;
- opening up its distribution platform to hand-picked independent properties in June 2015;
- buying luxury serviced-homes firm Onefinestay in April 2016; and
- repositioning its HotelInvest division as a subsidiary in push to attract big capital in July 2016.
Acquiring FRHI Holdings and brands Fairmont, Raffles and Swissôtel, also in July 2016, cannot be considered a bolt from the blue. That was merely AccorHotels’ big play in the current round of consolidation, but ask any number of hotelier insiders and they will say it is far and away at least the most interesting hotel firm to keep track of.
But if one question stems from this praise, it is that there is a gap in the AccorHotels empire, and it is one the company is well aware of and has commented on—its economy and midscale hole in the United States and Canada.
From conversations I had last week with AccorHotels’ Steven Daines, CEO, HotelServices, Northern Europe and Russia; and Thomas Dubaere, managing director, United Kingdom and Ireland, the French hotel firm wants to do something about that.
“The U.S. is challenging (for AccorHotels in those segments), but we need to bring something to the party. The North American market is very resilient, and we are not taking part in that,” Daines told me.
But how can it take part? We can only speculate, but we know that it has not been partying in that property class since it sold its Motel 6 and Studio 6 portfolio to Blackstone Real Estate Partners in May 2012.
Wow, doesn’t that feel like a long time ago!
Daines and Dubaere hinted its Sofitel flag would be a brand it is likely to expand, perhaps in the U.S. and Asia. It might be that Accor’s strategy will be to first increase recognition of all its existing European brands among North American guests—a move that will be helped along by its FRHI Holdings acquisition.
“In the U.S., we will boost awareness of Accor through awareness of specific brands. It is important for (Americans) to get to know Accor as a company as it is the name of our distribution and loyalty platforms,” Daines added.
I would guess that a U.S. economy or midscale buy will be along Accor’s path, but when that would be is anyone’s guess. An expansion of its three new flags in the North American market would help, but this will take time, considering their luxury, limited nature (all three brands globally number a combined 155 properties).
Accor’s robust, healthy Ibis family of brands probably is not the answer to plug the gap. Its name recognition in the States is limited.
So, does Accor look to established brands in the States? A buy of a brand would not work just from the buy itself. A brand acquisition would need to tell an Accor story.
During a recent meeting with Bazin, the CEO said to me that Accor had missed the boat with the U.S.
But this is an innovative company that I have no doubt will surprise us once again.
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