The hospitality industry was battered by Covid-19 in 2020. During the worst part of the pandemic, around 3,000 out of 5,000 of the hotels in Accor Group’s network were closed. Today, almost all of them are open again. SkiftX spoke with Patrick Mendes, the company’s newly appointed group chief commercial officer, to learn more about how Accor navigated through the crisis and how they plan on applying key learnings to their strategic approach in 2021 and beyond.
Mendes joined Accor in 2005 and has held a number of positions over the years, including senior vice president global sales and distribution, COO luxury and midscale brands, and CEO Latin America. In November 2020, Mendes stepped into his new role, putting him in charge of sales, marketing, distribution and loyalty across Accor’s 40 brands.
SkiftX: What achievements are you most proud of and what excites you about stepping into your new role?
Patrick Mendes: I’m proud of the fact that we doubled the size of Accor in Latin America through organic growth and acquisition. We tripled the size of the luxury segment there. I’m also very proud of our work helping local communities, making sure we make a positive social impact, and that we operate in a sustainable way. During the pandemic, it has been even more important to be responsible.
I’m very excited because I’ve taken the lead on a new organizational structure within Accor that unites brands, marketing, sales, partnerships, distribution and loyalty functions under one fully integrated business stream. We have eight chief commercial officers in our various regional hubs working directly with me, but we’re still making sure they maintain local relevance. This new structure helps us gain cost efficiencies, and it also helps us act more quickly, which is more important than ever in today’s recovering marketplace.
SkiftX: On that note, what are some of the key learnings that came out of the Covid-19 crisis, and how are you applying them to Accor’s strategic approach in 2021 and beyond?
Mendes: At the beginning of the pandemic, there was a lot of panic. People thought the hospitality industry was in complete peril and that travelers would totally disappear. We had to be very cautious. From one day to another, some of our hotels lost 80 percent of their revenue.
The first thing we had to learn is adaptability. You need to be very flexible in today’s climate. The second thing is that you need to be very fast to adapt. If you don’t react immediately, you lose the confidence of your owners, franchisees, and business partners. We had to adapt very quickly on costs, which is not easy when you are a big group, but we were able to find solutions with our owners, our lenders, and our providers.
I can’t underestimate the need to move quickly on things that you control and things that have immediate impact, such as marketing, negotiating tax savings with governments, and other cost-saving measures. But when it comes to adapting the product to service consumer behavior, don’t make big changes too quickly because consumer behavior may be a temporary reaction. With the vaccine rolling out over the next several months, there’s the potential for meeting and events to make a comeback sooner than expected.
SkiftX: What are the key pillars of Accor’s commercial strategy moving forward? What are the top goals you’re hoping to achieve and how will this ultimately help set the group up for future success?
Mendes: We have three big fundamentals that will drive our strategy for the next two to three years.
The first pillar is loyalty distribution. Last year’s launch of ALL – Accor Live Limitless, our world-class loyalty program that encompasses all of our brands, was an enormous success. Now we need to accelerate the program and help customers understand that all of our brands are part of the same family. A client can travel from London to New York to a small city in Brazil or to Indonesia, and he or she will always have a lodging solution through ALL and Accor, from eco to mid-scale to lifestyle to luxury.
The second pillar is around brand alignment and distribution. We recently finalized a deal with the sbe group, which includes brands such as Mondrian, Delano, SLS, and Hyde. We also announced joint venture negotiations with Ennismore, which operates The Hoxton, Gleneagles, and Working From_ brands. All of these lifestyle offerings, including many of Accor’s existing lifestyle brands like TRIBE, JO&JOE, greet, and others, will be combined under a new, fully autonomous business entity. When finizlied next year, it will form the world’s leading lifestyle platform in the global hospitality industry. Looking across our entire network, we have 40 brands today, from the super economic ibis budget all the way up to the ultra luxury brands like Raffles, Banyan Tree, and Orient Express.
A key objective within that pillar is to add independent hotels to our collections. With the pandemic, a lot of independent hotels are struggling. It will be difficult for them to reopen and scale back up without a big distribution platform, a recognized brand or loyalty program behind them. With minimal investment, we can easily transform an existing independent hotel, regardless of segment, into one of our conversion-friendly brands: The House of Originals (luxury), MGallery (upper premium), Mövenpick (premium), Grand Mercure (premium), Mercure (midscale), ibis Styles (economy) and greet (budget). We can convert those hotels and add them to our distribution platform within a very short timeframe, usually two to three months.
Finally, our third pillar is to improve the quality of our digital experiences at all stages of the customer journey, not only in our hotels, but from the moment a customer decides to travel, all the way through their in-hotel experience, and even after checkout. Our innovation lab is working to create a more seamless customer experience as well as more meaningful engagement strategies that take into account better design, more technology inside our hotels and in our rooms, and more connectivity throughout the journey.
SkiftX: You are in charge of sales, marketing, distribution and loyalty. Is there a hierarchy of priorities? If so, what are they? How does each division work together to achieve a common goal?
Mendes: For me, there is no hierarchy. Everything is interconnected. We’re coming from a transactional experience with our clients to something that is much more human, much more experience-driven, and you can’t disassociate these divisions. They all work hand in hand.
For example, we have a lot of clients traveling for a week or two with their children, and they’re using two or three rooms at the same time – one room is for the kids, one room is for the couple, and the third room is acting as an office. They’re mixing business and leisure, using their loyalty points at the on-property restaurants, doing some work from the hotel, and heading out to explore the city later that night. It’s difficult to separate these actions, with sales on one side, marketing on one side, guest quality on one side, and loyalty on another. To be successful, we have to take a 360-degree approach.
We recently launched a project called One Team, where the whole company has one common goal, and the incentive framework of the company is based on the same objective. We’re all working from the same value-driven mindset. We have a massive database of more than 100 million users on ALL.com, so having a clear vision about this database, what we communicate with guests, clients and owners, and how we interact with users is very important.
SkiftX: What are you most optimistic about for the hospitality industry in the years to come?
Mendes: I’m optimistic that leisure travel will come back very quickly, probably stronger than before. Of course, domestic travel is already coming back strong in some markets. We have a lot of clients that used to spend two or three days on a weekend, and now they’re staying five days to a week or longer. I’m optimistic in the ability of our general managers to transform their business hotels from corporate and standardized into something more lively, more family-driven, with a more complete leisure, spa, and F&B experience. In the near term, the boost in domestic travel may compensate for the lack of international travel.
We have more than 5,000 hotels in more than 110 countries, and what’s happening in each country is very different. In China, occupancy is almost at the same level it was before the pandemic, which is quite impressive. In Latin America and the Middle East, it’s coming back and signs are trending in the right direction. Of course, it varies by region, depending on how quickly the vaccine can be deployed, but there’s a lot of pent up demand, and we are seeing this when we feature special offers and promotions.
SkiftX: What kinds of things is Accor doing to make a positive social impact?
Mendes: During my time in Latin America, I focused a lot on making a social impact, because there’s a level of personal fulfillment and spiritual-mindedness that is derived from showing concern for diversity, inclusion, equality, economic disparity, and sustainability.
This is part of our mindset at Accor, where we have over 300,000 employees around the world. We call them “Heartists” or “artists from the heart” and we’ve created a fund called the ALL Heartist Fund to support employees and partners affected by the Covid-19 crisis. Diversity is also very important to me personally, and I’m an ambassador with our RiiSE program, which aims to ensure equity between women’s and men’s salaries, and to give them the same opportunities for advancement within the company.
We’re also looking to integrate more closely with local communities. We have to move from being managers of hotels, rooms, restaurants, and bars to managers of space, managers of square meters, managers of a much wider array of activities. For example, we recently took over an historic venue in Rio called Largo do Boticário, and we’re adding a little museum, a bar disco, and space for artisans and exposition. We’re turning it into a place that hosts unique experiences. Hotels can be venues for creativity and innovation, not just a place where you sleep, eat, and have a drink. I think the future of hospitality is about that creative potential, about what you can do with each and every square meter.