Accor CEO: Hotel Development Struggles With Sustainability ‘Paradox’

Net room growth is a key metric for any hotel group, but one which Accor assures it is growing with caution. Its CEO Sebastien Bazin said that developing new hotels comes with environmental consequences the industry cannot ignore, but that in the end, new hotels are often good news for any destination.

“When you have a group like mine – that opens one hotel a day – I know we’re going to be opening fewer hotels if we want to comply with the theme of today [sustainability],” said Bazin, speaking at The Future Investment Initiative in Riyadh.

Under the Bazin’s watch over the past seven years, Accor’s portfolio has grown quickly, acquiring entire hotel groups at a time, including most recently, Ennismore. Accor has more than one million rooms and 6,500 hotels either operational or in the pipeline. Its development tagline is that Accor opens and signs one hotel every single day.

Rather than saying Accor would slow down development – he did not – he said that global travel must find a way to “redirect” travelers away from overcrowded destinations. Of the 1.5 billion travelers annually, 95% of them visit the same set of destinations, which makes up 5% of the planet.

Sebastien Bazin’s Paradox

According to Bazin, there is a prevalent “paradox” in the industry, where shareholders want to see portfolio growth, but they also want to see tangible progress in ESG.

The CEO said: “Here’s another paradox: All listed hotel companies, their shareholders value the group on the pace of growth [but] those same guys tell you be to be planet friendly. Well if they want that, we need to slow down the pace of opening.”

A Social Benefit

With all that, Bazin ended by saying that global hospitality should continue to grow, and continue to develop, because, according to his “mathematics,” the social benefit outweighs the environmental negative.

He said: “There’s another element [to CSR], what are you doing socially? You [operators] know you have an impact, you know that impact is detrimental to the environment, of course, I know that. But can we overcome that impact through training, education, and local procurement? I guarantee, if you do the mathematics, what you do for the locals is far greater than what you take away from them.”

“So, you should continue opening, because what it does for the local community is super important.”