Inside Accor’s Roadmap to Global Growth

Integrator Media had an exclusive interview with Camil Yazbeck, Global Chief Development Officer, Accor.

As Global Chief Development Officer for Accor’s Premium, Midscale & Economy Division, can you share your vision for the global expansion of the Group’s diverse brand portfolio?

Accor is a world leading hospitality group, offering experiences across more than 110 countries in 5,600 properties, 10,000 food & beverage venues, wellness facilities or flexible workspaces. In 2023, Accor realigned its divisional structure into two divisions, unified by one cohesive vision. This new structure has optimized our growth and performance, enabling us to deliver exceptional results globally.

Our portfolio is anchored by our 47 brands, including 23 Premium, Midscale & Economy (PM&E) brands, which comprise nearly 90% of our global properties and account for around 80% of our development signings. Last year was a record year for signings, and we’re looking forward to carrying this momentum into 2024 with positive projections for continued growth.

Within the PM&E division, we are proud to have three very popular and longstanding brands with global name recognition – Pullman (premium), Novotel (midscale), and ibis (economy). We are rejuvenating these brands by aligning investment and resource allocation to strengthen brand equity and brand loyalty. At the same time, with conversion presenting as a key lever for growth right now, we have five well-known PM&E brands that are extremely adaptable and efficient for hoteliers to join: Mövenpick, Mercure, Handwritten Collection, ibis Styles and greet.

How does Accor stay ahead of trends to ensure its offerings align with the shifting demands of guests and hotel owners? 

We believe that hospitality today is so much more than accommodation – we are actively developing and building holistic experiences for our guests as well as forging trusted and supportive partnerships with our owning partners.

Our vision is to create multi-faceted places – with our hotels at the core – where guests and locals can ’live, work and play,’ across the same project. Our pioneering approach to augmented hospitality means our projects can include different elements; hotel brands, extended stay, branded residences, food & drink, wellness and entertainment, all supported by our loyalty program: ALL – Accor Live Limitless. Hotel owners and investors appreciate this approach as an essential way to optimize revenue, unlock value and ultimately compress their cap rate.

“We know that nothing brings people together like sharing drinks and outstanding food together, so our food & beverage offerings are designed to attract local guests along with travelers.”

The new Couqley French Brasserie at Pullman Dubai Downtown is a perfect example of how we partner with high-profile partners to elevate, infuse energy and increase the flow of visitors into our hotels. With its signature central bar, French garden-inspired booth seating, dining tables under olive trees, lights hanging down from triple-height ceilings, and an exterior terrace directly accessible from the promenade of the Dubai Canal, the venue has become a favorite hotspot among the downtown crowd. This is a strategy Accor is successfully using around the world, to not only create more enriching guest experiences, but to also create greater revenue potential for our hotel owners, investors, and the Accor group.

More specifically, what is your vision for the Middle East Region?

This market is thriving, marked by strong RevPAR performance, a robust economy, and favorable policies that encourage responsible tourism development. Accor has ambitious growth plans for the region, with 60 active projects representing close to 12,000 keys that are expected to open under our Premium, Midscale & Economy brands in the next four to five years. We also have a multitude of projects in development across our luxury and lifestyle brands as well. 

Across the Middle East, namely KSA and UAE, the region is showing resilience in the face of rising construction costs for a combination of reasons, including investor profiles in the region, a robust economy and governmental policies and the rise of oil prices. In Saudi Arabia, Accor is one of the most established hospitality developers, having been active in the market for more than 30 years. Since the announcement of Saudi Arabia Vision 2030, Accor has played a key role in the development of tourism, through several diverse projects in key locations across the Kingdom. One of the Vision Realization Programs is The National Transformation Project, which includes development of the tourism and national heritage sectors. There is also a national focus on an identified priority list of 10 destinations by national tourism strategy such as Abha, Hail, Al Jouf, Madinah among others. Accor has a multi-pronged strategy underway to support all of the Kingdom’s objectives for Vision 2030, from expanding our areas of focus with leisure destinations (Red Sea, Al Ula, NEOM), to bringing more brands to second wave cities, to our strategic partnership with the Ministry of Tourism to empower Saudi talents through “Tamayyaz by Accor”.

Governments have a target to achieve based on the country’s vision and we are seeing determination in meeting these targets – there is close collaboration between the public sector and private sector to ensure project delivery remains on schedule. In addition, international consultants are partnering with governments to create attractive destinations and accomplish multi projects across either one or numerous markets.

We are confident the region has favorable tailwinds, ensuring projects will continue despite inflationary and cost pressures. There is a high level of spending power in the region to fund domestic travel and we see great potential in Tier 2 and 3 cities with undiscovered natural beauty, evidenced by Accor’s 2023 signing of a master development agreement with Amsa Hospitality to develop 18 premium, midscale and economy hotels across secondary cities within Saudi Arabia over the next ten years.

With over 20 brands under Accor’s Premium, Midscale, & Economy division, how do you ensure each brand maintains its unique identity while contributing to the overall company strategy?

Accor’s strength is in the broad diversity of our brands – the powerful legacy of our core brands, the huge growth potential of our conversion brands, and the unique opportunities among our tactical and regional brands. Our Premium, Midscale & Economy division is structured in such a way that we have the strength to expand our brands with force and scale, maximizing development profitability and increasing operational performance. Organized across four regions: Europe & North Africa; Greater China; the Americas; and Middle East, Africa, Turkey & Asia-Pacific, our regional teams in each market are able to support hotel operational teams and roll out brand standards, maintaining brand continuity around the world, while being close and accessible to our owning partners and remaining nimble to adjust for market specificities.

How does Accor adapt its brand concepts and business models to suit the unique demands of different regional markets?

We prefer to design brands with characteristics that appeal to travelers all around the world. Pullman, for example, is a brand that works as well in Paris, São Paulo, or Bangkok, as it does in Dubai or Makkah. The ibis brand family, celebrating its 50th anniversary this year, has become the world’s best known economy hotel brand, with 2,600 locations in 70 countries. At the same time, we place a high value on infusing our hotels with local culture and flavors – through unique guest experiences, locally-sourced food and drink, local art and design choices.

For example, Novotel offers four distinct design concepts that allow owning and franchisee partners to select an ideal style that best suits the character of the destination. Mercure on the other hand brings a locally-inspired ethos to each of its hotels, as guests of the new Mercure Dubai Deira will discover; while Mövenpick is an ideal brand for hotel conversions, with its adaptable standards that can easily accommodate local market style and guests expectations, as found at Mövenpick Hotel Jumeirah Village Triangle, a multi-property hospitality community in Dubai which also includes a Novotel and an Adagio.

Accor is a market leader in several regions, including Europe, South America, Middle East & Africa, and Asia Pacific. What are the unique strategies employed in these regions to maintain and grow market leadership?

We continue to deepen our leadership position in our historical markets of strength with Novotel and ibis, while expanding the network of Pullman more widely, including markets where we may not have full exposure. We are also keen to explore more untouched leisure destinations where our forward-thinking brands can deliver Accor’s positive hospitality approach to creating eco-friendly and enjoyable holiday experiences. Another key element of our growth strategy is to address independent hoteliers that are looking for the strength and distribution of a global partner, while maintaining the unique character of the hotels they have created. We launched Handwritten Collection in 2023 in response to a market demand for a collection brand in the midscale category and it is already one of world’s fastest growing midscale collection brands. By the end of this year, we should have 30-40 Handwritten Collection hotels opening and operating.

The key to Accor’s leadership however, in my view, is the way we think like an owner – striving to match the right brand to the right project, thereby giving us the clearest route to meeting the owner’s cost of capital and return on equity (ROE) expectations. Our development teams are comprised of people with experience on the owners’ side. Accor itself has first-hand experience in the owner’s seat and although the Group shifted to a fully asset light business model several years ago, one of our core values is that we continue to think and execute like an owner. This means we bring that balanced perspective while delivering a level of strength and capacity more powerful than what an owner can achieve independently. Our local development teams in the Middle East bring on-the-ground market intelligence, coupled with the strength of our global scale and our relationships with 120+ developers around the world. 

What trends do you anticipate will have the most impact on the hospitality industry in the coming years, and how is Accor preparing to address them?

One of the most impactful trends is hotel conversions – the growing desire among independent hotel owners to find a global hospitality partner that can help them grow their business in an increasingly competitive market. Another factor is the current lending environment, which is making access to capital more challenging for developers.  In both cases, Accor has emerged as the partner of choice, thanks to our adaptability and commitment to innovation, our seamless transition process, our unmatched spectrum of brands, and our welcoming culture that celebrates authenticity, diversity and entrepreneurialism. Opportunities to convert exist across all of our brands, however we expect certain brands such as Mövenpick, Handwritten Collection, and Mercure, to continue being significant growth drivers in this space.

Second, the trend toward branded residences is expanding beyond luxury and lifestyle – segments which Accor also leads with brands including Orient Express, Raffles, Fairmont, Sofitel and more – into the premium and even midscale categories. Recent examples include Swissotel Doha Corniche Park Towers; Movenpick Resort & Residences Teuta Bay, Montenegro; Novotel Residences Makkah, Saudi Arabia; Pullman Residences Newtown Singapore; and Swissôtel Cesme, Turkey.

Apartment-style, extended stay accommodations are also increasingly attractive to younger generations of travelers who enjoy mixing business trips with leisure pursuits and who want to experience destinations more authentically when they travel. Developers and hotel investors are keen to develop extended-stay properties given the segment’s attractive business model – with lower breakeven occupancies, higher operating margins, and strong returns on investment. Fortunately, Accor has developed an expertise as one of the world’s largest operators of extended stay and serviced apartment properties, with a diverse portfolio that includes 13 brands ranging from economy to luxury, including longstanding market leader Adagio; the refreshingly modern Mercure Living and Novotel Living; and the innovative premium offerings of Swissôtel Living and Pullman Living.

Finally, Accor is also leading the way in sustainable hospitality – a shift that is more than a trend, it is essential for the future of the travel industry. Accor’s development team is committed to creating positive impact – economically, socially & environmentally. We collaborate and engage with our investors, hotel owners, employees, suppliers and guests to undertake the journey together towards net-zero carbon. All our brands operate in line with Accor’s ESG commitments, as well as their own brand-led strategies and initiatives in fostering positive hospitality and environmental action – such as Novotel’s new international partnership with WWF (World Wide Fund for Nature) that will see Novotel champion the protection and restoration of the ocean through science-based action and conservation projects. Another one of our brands, Mantis, recently unveiled plans for three new properties in Bahrain, Saudi Arabia and the UAE. Renowned for its lush, eco-resort experiences and commitment to preserving the communities, wildlife and the environment.