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Whether it is acquiring brands or launching their own, hotel groups have been eager to expand their portfolios — and none more so than AccorHotels, the largest direct, unfranchised operator of hotels on the planet.
In May, the Paris-based hotel colossus completed its acquisition of Australia’s biggest hotel group, Mantra, for $1.2 billion. In April, it took a 50 percent stake in Mantis, a South Africa-based hospitality group and it agreed to acquire Mövenpick Hotels & Resorts for about a half billion. In 2016, it made a multi-billion-dollar purchase of the Fairmont Raffles Hotels International. The company now manages 32 brands.
Some industry skeptics question the need for hotel groups to add many brands. One argument against the growing portfolios is that having to advertise many brands may dilute a group’s overall marketing effort.
But AccorHotels Chairman and CEO Sebastien Bazin dismissed such talk when he spoke on April 26 in Berlin at Skift Forum Europe.
“Anybody telling me, “You should be limiting the number of brands,” I think it’s bullshit,” Bazin said.
Bazin, who became CEO in August 2013, has added many brands and said he plans to add and support more.
Bazin said that the seemingly obvious reason to acquire and build more brands — namely, having more inventory to sell — isn’t his main objective.
He dismissed that as old-school “product-centric” thinking and said he is instead “client-centric,” by which he meant focusing more on serving a customer in all their varied personas and changing needs.
“I need to provide as many brands as I can to make sure I’ll be top of mind,” Bazin said. “Whether it’s Mövenpick or Fairmont Raffles or Banyan Tree or MamaShelter, or 25hours, it’s the same formula.”
Bazin argued having more brands means having more opportunities to engage with the same customer, such as whether its family travel or business travel.
Does maintaining multiple brands water down the effectiveness of overall marketing expenditure? No, he said.
“A group like Accor — like Marriott, like Hilton — we can afford to have many brands because the digital space enables you to have a portal under which you irrigate many brands,” Bazin said. “Some may be only local. Other brands will be international because they’re easier to replicate.”
Having multiple brands also enables the group to directly cross-sell an existing customer on a different brand through, say, its AccorHotels mobile app. It thus avoids having to spend advertising dollars on, say, Google, to woo the same customer twice, he said.
The CEO explained his brand strategy with the metaphor of friendship. “You have to look at a portfolio of brands as being exactly the same thing as [having] a group of friends,” he said.
“Each of you has 20, 30, 50 friends,” said Bazin, speaking to the audience. “When you want to go to work, there is a friend you like working with. When you want to go and have a solid drink, you think of a friend. If you want to go dancing, it’s going to be a different friend. If you want to go to the beach, it’s going to be a different friend.”
By Bazin’s logic, a traveler looks to hotel brands in a similar way. A traveler might look to different brands for different purposes, such as a lifestyle brand when feeling health-conscious, a family-oriented brand when traveling with children, or a business brand when focused on meetings.
During the lively on-stage interview, Bazin also commented on his views on alternative lodging and startups — two areas AccorHotels has emphasized.
As far as his portfolio expansion goes, Bazin’s message is clear. He plans to continue. “Don’t be afraid of anybody buying more brands.”
You can watch the entire interview above, or consider reading more coverage of Skift Forum Europe.
At Skift Forum Europe in Berlin, Europe’s travel leaders gathered for a day of inspiration, information, and conversation.