INTERNATIONAL REPORT—As France-based Accor looks internally to determine a leader for its new Ibis “mega brand,” the company said it has committed €150 million (US$204 million) to help speed along rebranding and renovations at properties that will be joining the Ibis portfolio.
“We will finance the change of the signage for all the properties,” said Yann Caillère, president and COO of Accor. “Why? We want to go fast. In order to have the real effect, we don’t want to sit, to slow down the changing process.”
Earlier this month, Accor unveiled a new strategy for its economy brands, introducing a family of Ibis brands called Ibis, Ibis Styles and Ibis Budget. There are 915 Ibis hotels that will keep their name and undergo slight changes; roughly 130 All Seasons hotels will become Ibis Styles; and roughly 515 Etap hotels (and Formule 1) will become Ibis Budget.
The rebranding and renovations will be completed worldwide by early 2013, Caillère said.
“Basically we are shooting for 70% by September 2012 and by mid-2013 to have completed the entire network,” he said. “That includes not only signage but an advertising campaign that will be launched, possibly around the summer or fall of 2012, when we have a significant number of hotel changes already.”
“We explained to the franchisee association that they will have to finance the normal renovations, mainly,” Caillère said.
Already in progress, the Ibis Budget brand is upgrading to a new room concept that was introduced 18 months ago and now will be sped up. By 2013, Caillère said, 93% of Ibis hotels will have the new rooms, including corporate-owned hotels.
Caillère said new renovations will not exceed 5% of a hotel’s revenue and that Accor is determined to “stick to that.”
As a result, the new Ibis Budget brand will appear dramatically different in 2013. Ibis itself, though, will simply adjust some markers in public areas to make Ibis “more sexy, more modern.”
“Ibis Styles is young and very hip in the economy segment,” Caillère said. “It’s really very successful because of this modernity. For Ibis at the start, it’s just a matter of the pace of development.”
Development plans
Today, Accor’s owned and franchised economy hotels are split almost 50-50. A plan to move asset-light has been in place since 2005 and newly appointed CEO Denis Hennequin hopes to accelerate that strategy, aiming for an 80% asset-light structure.
The development pipeline is indicative of that strategy, with about 90% of new additions to the portfolio expected to come in asset light. To speed up the development of Ibis, Accor might have to inject some capital into more assets, Caillère said.
Whether growth of Accor brands—including Sofitel, Pullman, MGallery, Novotel, Suitehotel, Adagio, Mercure and Ibis—will come by way of conversion or new-build depends on the region.
In mature markets like France, Caillère said, most of the growth will come by way of management and franchise contracts on conversions. In emerging countries, most of the growth will come by building new hotels.
“The growth plan we have in Morocco is 90% new hotels,” he said, adding development plans for Morocco include Sofitel, Ibis, ibis Budget and Novotel.
In 2010, Accor added 25,000 guestrooms. The company is accelerating that strategy and hopes to open 35,000 in 2011 and 40,000 in 2012. Sixty
“Now we see in emerging countries the opportunity to develop an economy brand,” Caillère said. “Basically we see that in Latin America where we have a very strong presence in Brazil, and we are growing fast in different countries, such as Argentina and Peru.”
Outside of Ibis, Caillère said Accor sees a great opportunity for upscale and luxury hotel development in emerging markets. The Pullman brand has made great strides in the Middle East region and will soon debut in Latin America. Also in the midscale market, Accor will soon begin focusing on a remodeling of the Novotel brand.
“We will even be launching a new brand in China called Grand Mercure,” Caillère said, adding that launch will take place by the end of this year.