Skift Take

Yes, it’s easy to scoff at Accor launching yet another brand. But inking deals with independent luxury hotel owners requires a collection the Paris-based hotel company didn’t readily have in its line-up of more than 40 brands.

Another day, and another soft brand that tethers properties to a major hotel company but without all the design and standardization requirements of something like a Sofitel or a Fairmont, is entering the hotel orbit. 

Accor launched this week the Emblems Collection, a luxury soft brand of hotels starting with the 64-suite Guiyang Art Centre Hotel in China’s Guizhou province. If it seems like the soft brand pool is getting a little crowded, that’s because it is.

Emblems Collection joins Accor’s other soft brand, MGallery, and arrives after others like IHG’s Vignette Collection and Wyndham’s Registry Collection Hotels were announced earlier this year. Marriott and Hilton already compete in this space with several soft brands apiece. 

Has the hotel industry morphed from one with concerns of brand bloat to one of soft brand bloat? Maybe, but Accor leaders see their latest as a vital tool in making deals with luxury hotel owners during the pandemic recovery. 

“There are several competitors, but we are not frightened at all. We think it will be stronger,” Agnès Roquefort, Accor’s chief development officer, said in an interview with Skift. “Some markets like Europe are still huge independent hotel markets and are where we are super strong in terms of distribution, commercial, and loyalty.”

Emblems Collection targets more traditional luxury hotels than MGallery, which has attracted more than 100 hotels since its 2008 launch. Accor plans to have 60 hotels within the Emblems Collection portfolio by 2030.

While some may roll their eyes at Accor launching yet another brand — the Paris-based hotel company already has more than 40 — a soft brand targeting luxury hotels is a missing link compared to its competitors. 

Marriott has the Luxury Collection. Hilton has LXR. Wyndham and IHG’s recent launches are also targeting the high-end sector of independent hotels, a signal the industry sees more runway in wooing independent, luxury hotels.

Targeting the luxury sector is the latest in major hotel companies trying to appeal to independent hotel owners with soft brands, affording them more autonomy around things like design and operations while still benefitting from being a part of the larger company’s loyalty network and distribution platforms. 

Major hotel companies like Accor anticipate that’s a major selling point to hotel owners looking for as much exposure to potential travelers as possible coming out of the pandemic.

“Whether you’re in a developed market or a developing market, we’re at a time where owners are savvier now than ever, based on what the world’s gone through,” said Gary Rosen, Accor’s CEO of Greater China. “So, they’re looking for ways to ensure that they can actually deliver a great bottom line. Being part of a larger network without losing their own identity is a match made in heaven.”

A Haven in Europe

For once during the pandemic, Accor’s significant exposure across Europe will be a massive advantage. This has been a liability, given the various waves of lockdowns and pandemic mitigation strategies by individual countries.

But Europe has a lot of independent hotels that could decide some sort of brand affiliation is a benefit during the recovery. 

There are 3.3 million independent hotel rooms across Europe compared to 2.1 million attached to a brand, according to STR. That’s a lot of conversion potential compared to the U.S., where nearly 4 million rooms are branded and 1.5 million are independent.

Other hotel companies also see opportunity in Europe, as Hyatt’s recent $2.7 billion Apple Leisure Group acquisition was fueled by the company wanting a bigger presence across the continent. That deal boosted Hyatt’s European presence by roughly 60 percent, but Accor leadership doesn’t seem too intimidated by others elbowing into their backyard.

“They should. They’ve been crushing me in America and in China,” Accor CEO Sebastien Bazin said at Skift Global Forum this year of his American competitors beefing up their European plans. “I won’t crush them because Europe is big, but I’m not going to make it easy for them.”

Accor’s own expansion strategy with Emblems Collection centers around negotiations with owners of already developed property. Conversions, where an owner of an existing hotel takes on a brand affiliation, are a major source of growth for soft brands. 

Accor anticipates more than 70 percent of growth at their new soft brand will come from conversions, both from conversions of existing hotels as well as converting other types of buildings like office. The Guiyang Art Centre Hotel building was originally built as a private residence.

But company leaders aren’t ruling out new-build hotels coming into the collection, either. 

“Even in China, where there are many pure new-builds, we can have these opportunities. So, we are pretty confident that we will have opportunities,” Roquefort said. “Again, it’s to reinforce our luxury position and to show our great expertise in this segment.”

Geographic Strategy

Accor’s geographic strategy with the Emblems Collection might seem like a bit of a head scratcher: an initial hotel in China along with Australia’s Gold Coast and Sydney among the markets short-listed for future projects.  

Bazin and Jean-Jacques Morin, Accor’s deputy CEO, earlier this month highlighted both countries as dragging down company performance with lockdowns and closed borders

There are plenty of other cities and regions mentioned as potential future homes for an Emblem Collection hotel like London, Seoul, New York City, and Havana as well as more resort destinations like Tuscany, Mykonos, and Mexico’s Riviera Maya.

Rosen maintains the tougher lockdown stance by some of the company’s key Asia Pacific countries isn’t a forever issue, and China remains a vital part of the company’s growth plans.

“This is short-term,” he said. “The government is obviously just really trying to ensure that they’ve got additional stopgaps in place … It’s not a question of the borders not opening.”

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Tags: accor, china, coronavirus, coronavirus recovery, soft brands

Photo credit: The Emblems Collection launches with the Guiyang Art Centre Hotel in China (pictured). Accor

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