IHG and Accor Leaders See Short-Term Virus Response Fueling Longer-Term European Hotel Strategies

Two of the world’s biggest hotel groups are unfazed by the expected downturn in international travel: this will be a “unique” summer for Europe.

Despite the fact 40 countries are starting to reopen at different rates across Europe, both IHG and Accor claim they have clear recovery strategies.

“It is a very interesting time,” admitted Karin Sheppard, IHG senior vice president and managing director, Europe at IHG, “particularly when it comes to predicting how recovery will shape.”

But speaking at Skift Forum Europe on Tuesday, she said IHG had identified fundamentals that will play out, including how domestic recovery will come before international, in light of governments encouraging travelers to travel at home.

“We’re all watching the early indicators. Look at the online searches, people are searching domestically first,” she told to Skift Hospitality Editor Cameron Sperance. “A good example is Poland. Gdansk had healthy occupancy levels over the weekend. We’re all discovering new places on our doorstep.

“And we are all highly interconnected. We are only a car drive away to other countries. We’ll see the passion for travel and exploring will allow people to travel within Europe. It is a region that could not be not more diverse.”

And similar to a blockbuster movie, people are on the edges of their seats as they await the climax — which countries are going to open up first.

“There’s pent-up demand from those that would normally go internationally that is being reconsidered into Europe,” Sheppard noted. “It might take a while before we see travel between borders, but people can’t wait to see where they’ll be able to go.

“I’m seeing it here in the UK, where we’re sitting at the edge of our seats to understand where summer holidays can be taken, because of the easing of quarantine rules.”

Skift’s Sperance turned the question over to Franck Gervais, CEO Europe at Accor. When it comes to balancing travel’s return, is Accor doing anything different comapred to its competitor, IHG.

“No,” Gervais replied, “this summer will be unique. People have not planned to go abroad… we will make the most of it.”

While Marriott has warned the lack of business from U.S. and China may hurt its recovery, Gervais is optimistic for Europe despite the anticipated delays in long-haul flights returning.

“Europe is not a country, it’s a big continent,” he said. “What we’re convinced of is that Europe itself it has a strong leisure and business potential. In 2019, nearly 90 percent of our business was European. We talk a lot about U.S. and Chinese visitors, but really most inbound are coming from Europe.”

Cleaning Up

Meanwhile, Sperance quizzed the pair on how their properties plan to cope with stricter cleaning protocols.

IHG’s Sheppard said there was already an acknowledgement that safety, comfort and reassurance was going to be important to get people to travel again, and that the work done by large, global chains was helping by influencing governments to make sure there is a clear framework.

She argued it benefited the entire industry, as smaller hotels can take advantage of the guidance — as demonstrated by the UK’s new Good to Go scheme. “We need to go out with strong messages to say it’s safe to go out again and explore,” Sheppard said.

Accor’s Gervais said he couldn’t agree more, noting customers will expect clean hotels for years to come.

He even thinks Accord can “turn a constraint into an asset” in the battle against the vacation rentals sector. “You will find clean, safe hotels. It’s state of the art. This is the beauty of our industry, and we should be in zero, zero, zero doubt about that. But we need also to keep this caring approach, this warmth. We need to reinvent together,” he said.

However, Sperance asked if luxury brands stand to be negatively impacted by this stricter, cleaner future. “A lot of these measures are temporarily wiping out these high touch amenities that people expect from luxury properties. How do you preserve that element of luxury at higher end hotels, in the early days of social distancing?”

Gervais said Accor had no choice but to comply, but would work in design elements to soften the approach,

“Whatever the brand, you will find those elements of safety,” he told Sperance. “But the way you experience it will remain different. The way we implement brand standards will be different. This is where the brand story comes in. The way you personalize the journey will become more important. It’s not because you’re implementing some protocols that your journey needs to be bad and ugly.”

Meanwhile, Sheppard said there were other opportunities to come from the crisis.

IHG has saw investors sign 104 global deals in the first quarter, and that more independents would likely look to join in the future, to seek more security. “Given that half of the stock in Eurpe is unbranded, there’s tremendous opportunity for conversions into larger hotel chain stock,” she said.

Gervais, meanwhile, said that hotels will be able to reinvent themselves to better cater for local communities, and incorporate social hubs.

“It’s a challenging era (but) we are optimistic, resilient and there’s strong hope for this recovery,”he concluded.