By Riddhi Doshi
What’s most striking about Accor Hotels’ big boss Sébastien Bazin, the man who leads 4,800 hotels across 100 countries, is his honesty. He doesn’t mince words. Ask him a pleasant question and he will charm you with his wit; ask him an unpleasant question and he will surprise you with his frankness. Bazin, the Chairman and CEO of Europe’s largest hotel chain is refreshingly candid.
Dressed in a pink Nehru jacket, wearing several armbands on his right hand and a sophisticated watch on left, Bazin announced the India debut of 132-year-old luxury hotel brand Raffles, which was acquired by Accor under Bazin’s leadership in December 2015. The $2.9-billion acquisition deal of FRHI Holdings Limited and its Fairmont and Swissôtel brands, from the Qatar Investment Authority, Kingdom Holding Company of Saudi Arabia and Oxford Properties, an Ontario Municipal Employees Retirement System company, is the biggest deal of Bazin’s tenure at Accor, since 2013.
In India, Raffles Jaipur and Raffles Udaipur will host guests from 2020, 2022. The hotel in the pink city is being built at Kukas, as a set of secluded private residences and courtyards adjacent to the larger Fairmont Jaipur hotel complex. The one in Udaipur is set on a 21-acre private island in the Udai Sagar Lake. The 101 lake- facing rooms open their windows to the sights of the surrounding hills and a 400-year-old temple. The suites come with a private swimming pool.
“Accor has never ever been as strong as it is today,” says Bazin. The company is opening a hotel every 30 hours around the world, and in two years it will launch one new hotel every day. The brand currently has 1800 hotels in France, 500 in Germany and 350 in England. However, India, a much bigger country, has only 51 and Bazin would like to see that changed. “I love your country. For me, it’s the most fascinating country on the planet,” says Bazin. The French businessman who is in India often hugely respects the world’s largest democracy “You have taught the world that it is possible for 900 million people to vote freely,” adds Bazin. However, as big as India is and as old a civilisation it is, with hundreds of heritage sites, diversified geography and extraordinary culinary experiences, it only represents two per cent of worldwide destinations. “That’s abysmal,” says Bazin. “I am intrigued and perplexed. We have 24 hotels here, that’s good but not good enough.
But I don’t want to critic what my team has done here, because they have done a great job.” The reason for the slow growth seems to be bureaucratic policies and procedures. “Three years ago, it took six years to get the permissions and open a hotel. Many processes have, however, been simplified, but it still takes four and a half years to set up a hotel. In China, it takes 18 months.”
The land and construction prices are higher too, and so is the rate of interest. It is also sometimes difficult to go from the airport to downtown, and diverse tastes add to the challenge. “But airports are nice and the airline sector is doing well. Overall, the hospitality scene looks good,” says Bazin. Accor’s goal now is to help India grow its representation in the global tourist industry. “People should get an opportunity to see the wonderful country,” says Bazin. To that effect, Accor is building 24 new hotels in India, hoping that these properties will put the country on the international tourism map.
The bigger ambition is to see a total of 300 Accor hotels in India. fte country currently has Ibis, Novotel, Pullman. There is also a focus on premium and luxury sectors. Bazin and his team believe that, both, Indians and foreign tourists will love the fine living experiences at the two Raffles, which, given the nature of the domestic market, will also focus on luxurious events and weddings.
What guests want
Internationally, Accor Hotels is investing heavily on understanding consumers’ needs, so that the hospitality chain can offer what clients want. Bazin believes that millennial travellers are beyond quality points and rate reductions. “To get them to sign up for a loyalty programme is tricky business,” says Bazin. For the past many years, loyalty programmes have focused on points collection by the guests, and in return, a hotel would give them chocolates and drinks. That would largely satisfy them.
“Today, people don’t want to have cocktails at the bar. They want something that they can’t do on their own. They want to experience and access culture.”
Accor Hotels conducted a consumer survey across 30 countries with 40,000 loyalty programme customers, asking them what they want and what would make them come back.
Below are the findings:
- Customers want priority access to concerts and museums; backstage entry and meetings with artists.
- Special culinary experiences by star chefs
- Access to sports like football
Based on these findings, Accor Hotels will soon introduce a new loyalty programme in partnership with a big company that organises international music concerts that will provide 70,000 tickets to Accor Hotels’ guests annually. The brand also has contracts with food festival organisers, IMG and French football team, Parisa Jana. “We have to understand that a client is not a number,” says Bazin “We have 300 million clients at Accor every year. But what one client wants is very different from what the other does. Someone likes sport, and someone likes food. I need to give enough incentives to every guest to come back and stay with us.”
The challenge, though, is to know what the same person wants at different times. A business traveller might want something else on his work trip and something different when he is vacationing with his family. “The change of preferences is very difficult for the team to adapt to, but we are working on that,” adds Bazin.
Negotiating with OTAs
The lead up to the mission to understand the guests better has been good thus far. Accor is one of the few hotel chains that has managed to convince OTAs (Over the Air travel portals), without jeopardising its relationship with key business players, that the best room rates must be available on the hotels’ website and not elsewhere. “It is our inventory and because we manage the rates and people, we should be offering the best prices” says Bazin. “Honestly, it’s been a boxing game. They were unhappy with us, but they eventually came around. Though one must flex some muscle to make this happen. If you are a 20-hotel group, I guarantee you that you can’t do this.”
It, nevertheless, will take some time to change people’s perceptions. Their past experiences tell them that the best rates are available on other platforms. Moreover, OTAs spend over $2 to $3 million every year on technology — website and app. “We spend 1/10th of it because we do not have so much money to spend only on technology.” Hence, it is difficult for a hotel to provide its guests with a seamless booking experience like that on any OTA. “We have to make very tough decisions on how we should partner better and still ensure that the focus is on clients and that we do not impose any systems on them,” says Bazin
The strategy next is to build stronger relationships with clients. For the past five years, Accor has been working on augmented hospitality to increase the brand’s interaction with guests.
Bazin breaks the strategy down for us. On an average, a client visits a hotel twice a year and the number of interactions is also limited to that. But a person’s interaction with any social media platform is about 12 times a week and in many cases, 12 times a day. To achieve higher number of interactions, Accor has been buying and investing in different digital agencies with private share economy. The figure currently is 20. they own Rumpole, the largest digital concierge for restaurants and museums; they have a 50 per cent stake in SBE, one of the biggest night club operators in the US. “We are finally putting all those pieces of puzzles together, to create one living eco-system,” says Bazin. “So, now I know that I am going to go from two interactions a year to, hopefully, two interactions a week. It helps me know you better. When I know that you are in Udaipur, I can reach out to you and offer you to stay at Raffles Udaipur,” says Bazin.
The relentless game changer is also committed to making some major reforms for his employees. Three years ago, Bazin committed to the UN’s #HeForShe campaign that seeks to promote women’s and men’s rights by pledging to reach parity in pay and equality between genders by 2020. Accor is among the five big industry players that signed the deal. “As a man, I don’t see any reason, whatsoever, why male employees should be paid more for the same job,” says Bazin. In the past three years, Accor has ironed out 98 per cent pay parity and will reach 100 per cent in the next three years. though, it might take a decade to get more women in top management roles as that will require training. “We have done a great job at the General Manager level,” says Bazin. “Today, we have 32 per cent women managers as compared to 25 per cent four years ago.” In South America, they have reached the 55 per cent mark. “Some cultures go faster,” adds Bazin.