In other words, don't expect AccorHotels to be vying for Wyndham's European vacation rental business anytime soon.
A lot has happened in the year and seven months since AccorHotels announced its intent to acquire luxury alternative accommodations provider Onefinestay for $168 million.
Since the acquisition, the founding CEO and his successor, another co-founder, left the company. The eight-year-old company, which had a little more than 2,500 listings in a handful of cities when AccorHotels bought it last year, now has more than 10,000 listings in 33 countries. That’s because AccorHotels in July combined several of its rental brands under the Onefinestay umbrella.
That move brought together Onefinestay Travel Keys, and Squarebreak under the leadership of new CEO Javier Cedillo-Espin, a longtime executive with AccorHotels and Starwood. Most previously, he served as AccorHotels global integration officer following AccorHotels’ acquisition of Fairmont Raffles Hotels, so Cedillo-Espin clearly has experience bringing acquired brands into the AccorHotels family.
Skift sat down with Cedillo-Espin when he visited New York earlier this month to ask him about his plans as the new CEO. Here’s what he had to say about the future of Onefinestay and alternative accommodations.
Why AccorHotels Combined Everything Under onefinestay
According to Cedillo-Espin, the primary reason why all three brands were combined was to give consumers more choice in luxury vacation rentals and private home rentals.
“Why did we merge? Why are we doing this? Really, we’re doing it because we saw the success of luxury private rentals,” Cedillo-Espin said. “We asked our customers what could get you to come back. They told us: ‘Give us more destinations.’ Over time, we’ve been able to collect that feedback and be able to understand more of the destinations that we could be in. That’s really where we’re focused. We’re focused on now being able to deliver that 180 destinations around the world. It’s a lot, but at the same time the space is big. The space is so big, and you know very well, this is an amazing space for us to be playing in. We see this with optimism, absolutely.”
Using the Onefinestay name made sense, primarily because of the “maturity of the brand,” he said. However, it should be noted that Travel Keys has been in business for 25 years. Squarebreak debuted in 2013, and Onefinestay launched in 2009.
“Onefinestay truly has a lovely brand promise. There was definitely much more maturity of the brand,” Cedillo-Espin said. “It was a merger of strengths. Squarebreak was much smaller and much younger than [Onefinestay], so we thought we would take from Squarebreak the curation, the passion of service, and we would integrate that into the brand.
“In terms of Travel Keys, it would be done in a similar way. They had specialized much more on some other areas of the world. It was a conscious decision. It was actually a difficult decision because when you merge three companies you have to take some of those difficult decisions, and to be honest we all fell in love with the [Onefinestay] brand. The founders of Squarebreak and the founders of Travel Keys also had so much respect for the brand.”
Onefinestay’s executive team now includes the co-founders of Squarebreak and a number of executives from Travel Keys, but all four of Onefinestay’s co-founders are no longer with the company.
Skift asked Cedillo-Espin why Onefinestay co-founder Evan Frank left in July after the consolidation of the three brands. Frank had taken over as CEO when co-founder and CEO Greg Marsh resigned following the AccorHotels deal closing.
“I think Evan was a wonderful leader, and I think that [the reason why] he left was to embark on a new adventure,” Cedillo-Espin said.
As for the integration of all three brands, he said that “it is going quite well.” In October, AccorHotels added all of its rental brand inventory to the Onefinestay site.
Plans for onefinestay and Breaking Even
Cedillo-Espin outlined what he hopes to accomplish as the new CEO of Onefinestay, including a focus on measured growth, service, culture, and expanding into new regions, including Asia.
“As new chief executive, I am focused on keeping the growth alive, and keeping it in a curated way,” he said. “Growing our destinations is a huge priority. How we’re going to do that is by finding the best homes and the best destinations. That’s a tough job. We’ve gone into 10,000 homes today, and we’ll grow another 1,000 by the end of the year. We’re working to be able to do that.”
He continued, “Being able to deliver a personalized and individualized service in these curated homes for me is extremely important. We have a brand promise that has done a tremendous job. For me, the next big frontier is taking it to the next level. I believe, in fact, that Onefinestay is a statement, a lifestyle — that we are actually transforming the travel industry and private rental.”
Cedillo-Espin argued that Onefinestay’s “end-to-end service” is “redefining the luxury experience,” something he called “all-inclusive care.”
He also intends to focus on culture by “building that network with the three combined companies that enables us to be able to have that service culture, that passion in everything we do, the dedication for others, and also that out of ordinary flair that we’ve put into all the experiences. That really is a strategy. The strategy is really to be able to continue to make onefinestay that extraordinary brand that people love.”
One region where Cedillo-Espin is eager to grow Onefinestay is in Asia, a place where Cedillo-Espin spent 10 years working.
Given these goals, Cedillo-Espin said he is confident that Onefinestay will, in fact, break even by 2019, despite UK Companies House files that show the company lost $37.3 million, pre-tax, in 2016. Turnover for Onefinestay grew 7 percent to $22.3 million in 2016.
“We’re still on track for 2019,” he said. And to get there, the brand will rely on growth and the ability to offer more global choices for consumers worldwide in regions and destinations that include North America, the South of France, Japan, Italy, and the Alps.
Scaling Up Without Sacrificing Quality
Given Onefinestay’s increase in listings — a 75 percent jump — how does the company intend to maintain the curated, handpicked reputation that it has had since it was founded? Will the company have to sacrifice quality for the sake of pursuing scale? Can that level of service be maintained?
“It is scalable,” Cedillo-Espin said, “In fact, the companies that we merged are companies that were already doing that. They were already like-minded and they have the expertise. Travel Keys had more than 15 years of experience in the concierge service. Really it was about the customer experience, it was about making sure that the pre-planning was set, it was about the curation of those villas. It was the same with Squarebreak. They were like minded, and they had the same passion for service and the curation of the experience. For us it enabled us to accelerate that growth.”
He also said that as the company grows, it will retain the same high standards it has had for accepting homes into its platform.
“It’s really hard because there are some amazing homes that we would love to bring, but we’re quite tough,” he said. “There will be homes that won’t meet our standards as well. Those homes will also go out. If we have issues with our homes because of bad experiences or of maintenance or situations like that, it definitely is also part of our criteria.”
Why Luxury Matters
AccorHotels isn’t the only hotel company interested in the sharing economy, or vacation rentals, for that matter. Earlier this year, Airbnb acquired Luxury Retreats. And when AccorHotels gave up its investment in Oasis, also known as Oasis Collections, this July, Hyatt swooped in as a lead investor in that brand.
Wyndham Worldwide, one of the world’s largest vacation rental companies, is currently in the process of selling off its European vacation rental business as it pursues a spinoff. Airbnb is a reported suitor for that European business.
But for AccorHotels and its Onefinestay unit specifically, Cedillo-Espin said the goal is to stick with luxury, and not to venture into other categories of vacation and short-term rentals.
When asked why AccorHotels decided to cease being an investor in Oasis, he said: “For us, really what we had in mind was focusing on Onefinestay, Squarebreak, and Travel Keys where we had the full acquisitions. For us, we know that this is where we wanted to take the company and grow it. The fact that there are other competitors coming in, for me, is a good sign that the industry is growing, and there’s space for many players. For us it’s a matter of focusing on Onefinestay.
“The project was about making sure that the full acquisitions were where we were focused, and in fact, I’m glad that we were the pioneers in this because I believe that there’s space for many people. … For me, when I see the consolidation of the industry, when I see the growth is that there are others, not only us, that believe in the growth of the sector. For me it is all good signs. I’m a big optimist of this sector.”
That optimism, he said, is another reason why Onefinestay will always be focused on luxury. “How we grow Onefinestay will be through the curation, through the curation of the properties, through partners that enable us to do that, through us being able to grow. Really that is our focus, and it’s really in the luxury segment.”
For that reason, while Cedillo-Espin never denied it, he did seem to imply that Onefinestay, at least, was not interested in acquiring Wyndham’s vacation rental business.
“For me there is space for many players,” he said. “Our strength is in the luxury sector, and that’s really where we’ll continue to focus. It’s a dependable space for us. Luxury is a dependable space because it’s about service, and it’s about a relationship with guests. We believe the luxury private rental is about building guest relationships. In the luxury space, you have much more margin for that, and you have much more space for that.”
Integration and Synergy
When AccorHotels announced it would buy Onefinestay in April 2016, AccorHotels CEO Sebastien Bazin told Skift, “You don’t know how strategic and key this acquisition [of Onefinestay] is for changing AccorHotels. It’s all about providing guest satisfaction and onefinestay is so unique and their team is so strong, it will bring enormous value to our company.”
Bazin also said that within three months of the deal close, customers would be able to book a Onefinestay accommodation via AccorHotels.com and that later that summer, the loyalty program would be added so that LeClub AccorHotels members could earn and redeem points through Onefinestay.
But more than a year later, that’s not necessarily the case. When booking an accommodation on AccorHotels.com, Onefinestay listings aren’t always shown alongside hotel options, and there is no connection to AccorHotels’ loyalty program for booking a Onefinestay home.
“We have some links that that you from AccorHotels to Onefinestay, and for now that’s as much as we’ve been able to do,” Cedillo-Espin said. He did say that while there is no loyalty connection yet, Onefinestay is being marketed to members of Accor’s loyalty program “from time to time.”
Cedillo-Espin also hinted that there will be more synergy among Onefinestay and AccorHotels’ other brands and business going forward.
“We’re quite complementary,” he said. “We also work with our hotels, and they help us, and we have pilots that — I can go deeper into details when we make them public — but we have pilots for them to be able to have a relationship with us as well. Sometimes, when we have a stay in onefinestay and we need one night or two nights extra, we have a wonderful relationship with the hotels that enables us to be able to book that stay that week and have the one or two nights before the trip or after the trip at one of the Accor hotels.”
Cedillo-Espin said Onefinestay is working with concierge service provider John Paul, which AccorHotels acquired a majority stake in last November. “It’s a symbiotic relationship, so it helped us enrich our already rich concierge experience. We were talking about how we were going to be able to scale luxury and this is also what we’ll be doing. It is through all these partnerships with services like John Paul, they’re going to help us [scale luxury] because they specialize in that.”
Cedillo-Espin said that Onefinestay’s strength in the Caribbean villa market will help Accor because it’s an area where the company doesn’t have as many hotels. “We’re able now to be able to have that footprint in an area where Accor doesn’t have that many hotels. That’s a great way for us to be able to gain more market share of that traveler,” he said.
The Next Big Disruption in Alternative Accommodations
What’s next in alternative accommodations? According to Cedillo-Espin, it’s about using technology to create “hyper-personalization” or a “next-level customer relationship management.”
“From our perspective in the strategy, [the next big disruption] will be about taking that in-stay experience and making it hyper personalized,” he said. “Hyper personalized is a key word for us. Today it’s been taken to a level that’s made us different, better, and special, but we will take it a step further and make sure that it’s hyper personalized and that it’s gaining that moment of joy. It’s about creating and finding those moments of joy for the guest that helps us build that higher level of living. That is what connects for us through the strengths and talent that we have.”
Powering that, he said, will be technology. “The technology that we’re investing in right now is about truly better understanding our guest and being able to react to our guests. We’re building processes, and we’re building technology that helps us with guest ontology. The more you tell us, the more we react to you.”
Said Cedillo-Espin: “I actually see that to be revolutionary, because that is the new luxury. New luxury is no longer about products. It’s about hyper personalized experiences that have a very meaningful and memorable impact in our guests’ minds. Our guests are willing to pay premium for that. That’s where for me, that’s when we’ll go into technology that enables us to do that, specific for private rental, which is a different space because you have homes, you have destinations, you have different things, and we will see that technology evolving, at least for us. That’s where we’re going to be taking it.”
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Photo credit: Javier Cedillo-Espin, the CEO of Onefinestay, projects that the AccorHotels subsidiary will be profitable in 2019. Onefinestay