Accor Leans Into Premium Hotel Brands, Franchising, and China

03.03.2024 - 15:09 / skift.com / Sean Oneill / Jean-Jacques Morin

Since Sébastian Bazin became its CEO in 2013, Accor has had a series of transformations and done a lot of acquisitions, such as Mövenpick, Fairmont, and Mantra, and joint ventures, such as Ennismore.

But Accor detailed last July something of a five-year-plan, with detailed commitments on performance benchmarks it intends to meet. That was a declaration that the group essentially has what it needs. Aside from the occasional opportunistic acquisition, it seems mostly set on growing with what it has.

So when top Accor executives were visiting New York City in late February, I went to interview them about their game plan. I spoke with Jean-Jacques Morin, Group Deputy CEO and CEO of the premium, midscale and economy division, and with Martine Gerow, who joined Accor in July 2023 as group chief finance officer.

Accor’s premium, midscale, and economy brands have been in many markets for up to 50 years, the executives said.

“In places like Australia, Indonesia, Singapore, and Thailand, we have strongholds because PM&E [premium, midscale, and economy] is a density model,” Morin said. “Having a concentration of hotels is cost-effective for operations and helps increase guest loyalty. We’ve been using those places to leap to go deeper in markets like Japan, where we’re the second-largest network — and we built that up relatively quickly.”

Accor’s economy brands like Ibis have performed strongly in hotel development and guest demand in those countries and in other key markets, such as in Western Europe. Yet for its premium brands, Accor hasn’t been getting its fair share of hotel development contracts in many of those countries, analysts say.

In response, the hotel group has been fine-tuning its premium brands. The goal has been to enable better owner compliance with brand standards and to better match standards to guest needs for a particular brand has helped, executives said.

“We’ve tripled the level of signings in 2023 for premium brands,” Morin said. “We recently said that the whole PM&E category is seeing signings up 40% over 2019 levels, and a large part of that is we finally captured our fair share in premium.”

Every so-called “hard” hotel brand comes with a proverbial binder of rules that an owner must follow. The paint on the wall needs to be a particular shade. The ratio of staff to guests should be a certain number. And so forth.

Accor used to have some of the most detailed rules for its premium, midscale, and economy brands. But that has recently changed.

“Brand power is your best defense,” Morin said. “Brand recognition is an accelerator of growth.”

Accor wanted to ensure that all hotels displaying a brand name are meeting standards and that owners are providing consistent service. So it simplified