If there’s one thing AccorHotels has gained a reputation for in recent years, it’s buying nearly anything and everything in sight.

That might be a bit of an overstatement, but in the past four years alone, AccorHotels has bought or invested in nearly 20 different businesses, ranging from restaurant reservations platforms and concierge services to luxury hotel brands.

In those four years, the global hospitality company has gone from being what CEO Sebastien Bazin described as “a big sleeping giant” to a “first mover” that isn’t afraid to take risks when it comes to their investments and acquisitions.

Bazin explained his own thinking behind AccorHotels’ investments in various businesses, especially startups, when he spoke at the Skift Forum Europe in Berlin in April.

“We’ve made 12 to 17 investments (in startups) and I really believe that 20 percent of them will not work,” Bazin said. “It might be the wrong equilibrium on the team, or the wrong idea, or it may be too late. Twenty to 50 percent will be remarkable. A third will be average. This is the name of the game when you enter into unknown territories.”

In other words, he said, it’s OK to fail and not everything you invest in will be the next big tech unicorn. But the bigger failure is not acting on these opportunities when you can, especially when you’re trying to build an entire experience platform business as AccorHotels is.

For more of an inside look into AccorHotels’ specific strategy for what it decides to buy or invest in, Skift spoke to AccorHotels’ Chief Development Officer Guarav Bhushan, who also leads mergers and acquisitions for the entire group.

What follows is an edited version of our conversation with him at the NYU International Hospitality Industry Investment Conference in early June.

Skift: With all the acquisitions you’ve made recently, does it make it a challenge to focus on development and to balance that with all the organic growth you’re also pursuing?

Guarav Bhushan: We’ve got to do both. We’re an ambitious, growth-focused company so we have teams that do both so we do both concurrently. We have a specific M&A team that is focusing on acquisitions and then we have an organic focus growth development team. And we run both side by side. One feeds into the other, because we typically focus on brands that we can grow, and that generates value for our shareholders obviously, and we grow the brand, the network, etc., but they are two different teams.

Skift: What will Accor not buy? What’s the criteria for the types of investments that you’re looking to make?

Bhushan: There’s two or three key criteria. One is, it’s got to fit in with our whole brand portfolio, brand strategy, and areas that we are trying to grow fast in.

We made a decision a few years ago, as you know, to focus a lot on luxury. You have seen a lot of our development, our M&A activities have been in the luxury space, in the lifestyle space. And then also in the leisure resort space. So, these three areas have been a big focus and when I talk about luxury, I extend that into upper upscale and luxury, all the way in that space. Not midscale and economy. And you’ll see, the vast majority of what we’ve done is really in that space.

Then we have also looked at the creative regional acquisitions like Mantra, like Atton in South America because we have strong leadership in these areas and where we can find deals that are financially very accretive to us. Where we can generate a lot of value and create a lot of synergies on the operating platform, we will do them because they make a lot of financial sense for our shareholders. And it grows the network, it creates, it helps us enhance our leadership.

So, for M&A, the two principles for us are the strategic brand fit. All regional acquisitions must enhance our leadership position. But in the end, the overarching principle is it’s got to be financially accretive to our shareholders, as a public company. The numbers have to work.

Skift: If AccorHotels does invest in Air France-KLM, what’s the potential for how Air France-KLM and Accor could work together?

Bhushan: I mean, it’s very early days. I can’t say a lot about it because we’re literally at a very exploratory stage. But there is a logical relationship, we believe, on the digital side, on the loyalty side. Air France has a fantastic distribution and loyalty program. We see a lot of synergies in that space but we’re really at very, very early stages. So, I can’t say a lot more than there’s something there, but we need to explore and see if it can all work out and if it makes sense overall.

Skift: What are you most looking forward to with AccorHotels’ Mantra Group and Mövenpick deals?

Bhushan: A couple of different things. So, each investment, each acquisition has its own strategy.

Mövenpick just fits in perfectly in that upscale segment where we’re looking to enhance our presence. They’ve got a great footprint in Europe, the Middle East, Asia-Pacific, and now increasingly in Africa, and those are markets that we lead in. So, it’s such a perfect fit at several different levels. We think we can enhance the development of the brand significantly.

It’s a European brand, and it’s got strong Swiss heritage. It fits in very well as a European group into our brand portfolio. We know how to leverage that European-Swiss heritage well. And then, the numbers, for us, were very attractive financially. It made a lot of sense for us, and we can drive a lot of synergies in the operating platform. It makes perfect sense at all levels. So, we went in for it, and are very happy to have made the acquisition.

With Mantra, again, the starting premise is it’s got to be value accretive, very complimentary to our Australian portfolio, because Mantra is mostly apartments, and our current portfolio is mostly hotels in Australia. So, it’s a really good fit. Most of our current network is in Sydney and Melbourne, Brisbane, Perth, the key big cities in Australia.

The Mantra network is more leisure based and [in the] Gold Coast. They have a strong presence in some of the cities but their single biggest presence is in the leisure markets. So, both from a geographic perspective and from a segment perspective, it’s a great combination to our existing network, even though we’re the No. 1 player in Australia and they were the No. 2 player.

We have very complementary networks, so putting the two together makes a lot of sense and when you think about the power of the distribution and the loyalty that we can then put on top of that with the Mantra properties and bring our own loyalty customers onto that network, there’s a real value proposition there at several levels again.

Skift: Speaking of apartments, how do you approach development when it comes to the homesharing or private accommodations space? Do you have to think of it a little bit differently than how you do with hotels?

Bhushan: Very much so. You’ve got to look at it differently, because you are targeting individual home owners as opposed to single owners of hotels, so the way you approach that development is quite different.

We have a dedicated team for Onefinestay development that is exploring new markets, looking at new geographies, but you are operating at a different scale, and a very different business model, because you’re trying to, talk to hundreds of different unit owners as opposed to 20 hotel owners. The volume is quite different and the type of owner is very different.

Skift: Sebastian Bazin hinted at this when he spoke at the Skift Forum Europe in Berlin, but he seemed to suggest that he wants to leverage the resources and the labor force that you have at your hotels and apply that to Onefinestay. Have you started testing that out more? Are you seeing how that might work?

Bhushan: Yes. We’re working with that because we operate in 100 countries and we have operating infrastructure in pretty much every major city in the world. Using that to provide value added services to our homesharing private rental business — whether it’s concierge, whether it’s chefs, whether it’s housekeeping — all of those additions that would differentiate a luxury private rental product from a more price-driven product, that’s what we want to do.

So, we’re testing that. We’re actively working on that and we’ll continue to expand and enhance that. That is one of the unique advantages we bring. We’re differentiating ourselves, providing real service in homesharing, as opposed to being just a price-driven product. That’s why we’ve gone and positioned ourselves in the luxury end of the market, because we want a differentiated private rental product.

Skift: Where is development most active, both for homesharing and for hotels?

Bhushan: For homesharing, we are still focused on the big markets: London, Paris, New York, LA, Miami, and Dubai. As I said, we’ve just launched into the major cities in Australia. So that will continue to be a strategy that we’ll focus on in terms of private rental.

For hotels, we have a much more extensive presence. Like I said, we operate on every continent. We have a team of 140 developers in every part of the world. Once we execute a different strategy in each region, but we are active in every continent. As a global hotel company, we have to be.

But in North America, for example, we focus very much on the luxury and lifestyle element. We’re not focused on the midscale economy side; we don’t play in that space, we don’t have the brands in this market that play in that space. We’re focused on the upper end and the lifestyle segment. We see ourselves as a strong player in that segment. I mean, there’s no point in being an also-ran. For us, we’re very clear that in every segment or market we want to operate in, we want to have a leadership position.

But then, when you look at Europe or you look at the Middle East or Asia Pacific, where we have a lot of volume — about 850 hotels in Asia-Pacific, over 100 hotels in the Middle East — we’re developing all our brands, from luxury all the way to economy. So, there we’re playing the scale game, and we’re developing our brands across all segments

Skift: Would that ever change? Would you ever try to add more mid-scale or economy brands in the North American market?

Bhushan: It’s not the intent at this stage. Never say never. Life changes, markets change. I mean, opportunities could arise in the future. But it’s not on the radar today as organic development. Our focus is very much on the luxury and lifestyle space.

Skift: Would AccorHotels try to do some something similar to the Marketplace initiative that was recently ended, to try to attract more independent hotels onto its platform and bring them under the Accor umbrella? How much attention are you paying to independent hotels?

Bhushan: If you look at what we’ve done with a lot of our investments, we actually have done that. Whether you look at our partnerships with Mama Shelter, with 25hours, with Rixos, which is an all-inclusive brand, with Banyan Tree, these are good brand partners of ours where we have investments and so our focus is either through full acquisition or partnerships that create a fairly extensive and comprehensive portfolio of brands that give all the options to our guests, and also to our owners, because we want to drive our network development.

Having the right portfolio brand obviously helps that, because we’ve become a one stop shop solution to our owners, but then the positive impact to the guests through giving them optionality with great new product, the loyalty, the stickiness for their customer, it’s double benefit. And in the end the two most important people in our lives as a hotel company are our owners and the guests who stay in our hotels. And if we can have the right brand strategy that adds a value to both, then we’re winning.

Skift: A last question for you: What are you buying next?

Bhushan: If I told you I’d have to kill you. [Joking, we hope.]

We are actively always looking at opportunities in the market. It’s hard for me to comment on that, as you can imagine. But we’re active. We’re very much focused, as I said, investments that are accretive to a brand portfolio and it’s got to be financially accretive. Those are two fundamental criteria that we live and breathe. And if they make sense, then we’re creative in how we structure deals. We have a very entrepreneurial approach on how we can make deals work. But you’ve got to start with the basics.

Photo Credit: The 25hours Hotel in Zurich West is pictured in this promotional photo. In late 2016, AccorHotels announced it was taking a 30 percent stake in 25hours Hotels with a plan to speed up a global expansion. 25hours Hotel Zurich West