One of the hottest areas for hotel companies is the open sea. Accor, the Paris-based hotel giant, hopes to launch a yacht-style cruise line Orient Express Silenseas by 2026, according to a report in Bloomberg News on Wednesday.
Adding to the multi-modal mindset, the 722-foot-long vessel will be branded after a famous railway brand, Orient Express.
Bloomberg reports that the ship will ply the waters of the Mediterranean and Caribbean and host about 120 passengers.
The move follows a multi-year effort by Ritz Carlton to create a yacht-like cruise line, as well as Virgin Voyages‘ semi-elite approach to cruising.
As announced in mid-2022, Accor is now in the process of reorganizing its operational structure into two divisions, the hotel group stated Tuesday.
Deputy Group CEO Jean-Jacques Morin heads the executive committee and serves as CEO of the Premium, Midscale and Economy division, taking in brands such as ibis, Novotel, Mercure, Swissôtel, Mövenpick, and Pullman. Accor structured the unit around four regions: the Americas; Europe and North Africa; Middle East, Africa, Turkey & Asia Pacific, and Greater China.
Group Chairman and CEO Sébastien Bazin leads the Luxury and Lifestyle division, serving as the division’s CEO. This division includes Raffles & Orient Express; Fairmont; Sofitel MGallery & Emblems, and Ennismore.
“Accor’s new organization is now being implemented progressively throughout the first quarter of the year depending on local legislations, particularly regarding the obligations to consult staff representatives,” the company stated. “The new structure will allow the Group to accelerate growth and better address market developments, deliver the highest possible levels of service for all its stakeholders, facilitating accurate and effective fulfilment of guest needs and expectations, and providing clarity and performance to its partners.”
The reorganization brings to the fore the possibility of divestitures, Skift reported in July.
The restructuring of Accor’s operations was originally pegged to take place October 1, 2022.
Accor, the Paris-based hotel giant, said on Tuesday that Omer Acar will head its brands Raffles & Orient Express as of March 1. Acar will join Accor’s other brand CEOs in its luxury and lifestyle group (Fairmont, Sofitel & MGallery, and Ennismore) — all of whom report directly to group CEO Sébastian Bazin.
Omer will be based in New York and will represent Accor in North America. He has most recently been managing director for Europe and the Americas for Katara Hospitality, where he supervised 18 hotels including the Plaza in New York, Peninsula in Paris, Carlton in Cannes, Excelsior in Rome, Grosvenor House, and Savoy in London.
The FIFA World Cup Qatar 2022 starts in five days, and Qatar is struggling to have enough lodging to house an expected 1.2 million football fans.
Qatar has only about 31,000 hotel rooms, according to benchmarking service STR, though Qatar Tourism says it has more hotels opening this month in time for the event — boosting its room count.
Many fans have looked beyond traditional hotels, booking more than 90,000 hotel rooms, tents, apartments, and temporary “portacabins” during the peak days of what’s called the biggest sporting event on Earth, Reuters reported. Three cruise ships from MSC Cruises turned into floating hotels are also welcoming visitors.
So which hotel companies stand to gain the most? Richard Clarke, the senior analyst for global catering, global hotels, and leisure at Bernstein Research, in a report on Monday, said Hyatt and Accor have the best on-the-ground positioning to take the most advantage of the top prices being charged during the event:
The Qatar World Cup has thrown up some interesting innovations for lodging, including the sustainable solution of using existing residential units rather than building new hotels, employing Accor as a manager of those residential properties to provide housekeeping and front desk services and the creation a dedicated booking platform rather than using existing OTAs [online travel agencies].
The upside for the World Cup for the hotel groups is likely 1-2 percent in the fourth quarter from the high price points (1000 percent mark ups) of their rooms during the event with Hyatt having the highest % of its estate in Qatar, but Accor likely benefits the most due to its unique deal.
The online travel agencies will likely benefit far less because of the existence of a dedicated booking agent, which has more choice for the event than the global platforms.
The hotel tech services company owned by hotel giant Accor is strengthening its offerings through the acquisition of a digital marketing agency.
Accor-owned D-Edge said this week that it has acquired Equaero, a Paris company that uses a proprietary software platform for marketing campaign tracking and reporting.
Equaero is now a wholly owned subsidiary of D-Edge. It will continue being led by its founder and CEO, Jean-Dominique Brivet, who will report to D-Edge CEO Pierre-Charles Grob. All Equaero employees are expected to maintain their roles, according to a D-Edge spokesperson.
Terms of the deal were not disclosed.
D-Edge’s hotel offerings include central reservation software, a guest management system and more. The company has historically offered some digital advertising services to hotels through a partnership with Equaero. With the acquisition, those capabilities will become in-house services that D-Edge offers.
Equaero has experience in digital strategy for very large accounts, which will be helpful as D-Edge further develops services for hotel chains, the company said.
“As online sales continue to grow in the hotel industry, D-Edge — through its website development and digital media offerings — is already helping hoteliers drive more traffic to their websites and convert this traffic into more direct bookings,” D-Edge said in a statement. “By adding new capabilities and talents, D-Edge completes its service offering — [search engine optimization] to name just one — and provides hoteliers with an exhaustive, multi-channel digital marketing range of services.”
Accor formed D-Edge five years ago after two acquisitions. Grob said earlier this year that D-Edge roughly doubled its number of independent hotel customers during the pandemic, from 6,500 non-Accor hotels in July 2019 to more than 12,500 in April.
Accor, the Paris-based hotel group, said on Wednesday it would return to breakeven before the end of the year for its sales, marketing, distribution, and loyalty activities for owners of its branded hotels.
Accor said robust sales and earnings this summer along with tight control of costs had led the group’s management to raise its full-year guidance for 2022 earnings before interest, taxes, depreciation, and amortization — a measure of profit. Management had set guidance at above $550 million, but they now expect to generate between $593 million and $622 million (€610 and €640 million).
Accor also revealed it’s engaged in exclusive talks with Valesco Group to sell its Paris head office for about $452 million (€465 million). The asset disposal would be subject to a 12-year sale and leaseback agreement. It requires approval and is slated to be done by year-end.
The sale of the headquarters building is part of the group’s effort to lighten its balance sheet. The move toward leasing rather than owning may also provide a side benefit of letting the company scale up and down in office space as needed and as workplace trends evolve.
Accor’s board said on Tuesday the company wants to simplify its organizational structure to create two business units. The move, which raises questions about possible divestitures, has been sent to employee representative bodies for their approval.
The two business units would be an “economy, midscale, and premium” division for 4,816 hotels representing brands such as ibis, Novotel, Mercure, Swissôtel, Mövenpick, and Pullman. It will have four regional headquarters based in Paris, Sao Paulo, Singapore, and Shanghai.
Another division would be for “luxury and lifestyle.” It would get four brand collections that together have 488 hotels: Raffles & Orient Express, Fairmont, Sofitel & MGallery, and Ennismore.
“By evolving from a generalist to a multi-specialist model, our aim is to further improve Accor’s appeal in the eyes of talents, owners, partners, and investors,” Sébastien Bazin, the group’s chairman and CEO, said in a statement that didn’t mention any cost savings.
Cue the inevitable questions about whether this planned restructuring makes it easier for Accor to spin off a part of its company to an acquiring investor.
“We would also expect this makes a break-up more likely longer-term, where different owners may be different in the varying merits of the two divisions,” wrote the research analysts at Bernstein in a flash note to clients.
Analysts at Bernstein also note: “It makes sense that the two divisions will have different long-term models (franchise vs managed), different target owners (“mom & pop” vs sovereign wealth funds), and different customers (international vs domestic).”
Pity the executives at Swissôtel, though. They must be asking themselves, “Why aren’t we luxurious enough?”
In a move that was no surprise, the board also endorsed the renewal of the contract of Bazin as the group’s chairman and CEO.
Heavily-understaffed European hotel brands are now scrambling to hire workers, left with applicants with no experience or even no track record, according to Reuters.
Accor needs 35,000 employees in the 110 countries that it operates in. The hotel brand has been conducting trial initiatives to recruit people who have never worked in the industry, Reuters quoted CEO Sebastien Bazin as saying.
IHG Hotels & Resorts faces a 20 to 25 percent staff shortage, according to Keith Barr its CEO.
Widespread job vacancies and upward pressure on labour costs in UK’s hospitality sector had been highlighted by a CGA survey in April. The survey cited staffing issues as a major reason for impeding hospitality’s recovery from Covid-19.
Hospitality staff, who had been furloughed or terminated during Covid, have found better paying jobs in other industries and are no longer keen to return, aggravating the staffing crisis.
Further afield in the U.S., nearly all hotels are experiencing staffing shortages, and half report being severely understaffed, according to a new survey by the American Hotel & Lodging Association. Some 97 percent of respondents are experiencing a staffing shortage, 49 percent severely so. The most critical staffing need was housekeeping, with 58 percent ranking it as their biggest challenge.
Well, never accuse Accor of not experimenting with new things, maybe to a fault: it has taken over the operations of the legendary cruise liner and ship Queen Elizabeth 2. The cruise ship will undergo further upgrades and renovations prior to joining the MGallery Hotel Collection. Situated in Dubai’s Port Rashid, It becomes Dubai’s first floating hotel.
Accor is working with the Ports, Customs and Free Zone Corporation (PCFC) Investments LLC, a private equity firm working with Dubai government.
Once the renovation is completed, the new MGallery Queen Elizabeth 2 will feature 447 hotel rooms, nine food & beverage outlets, ten meeting rooms, 5,620sqm area for outdoor events, six retail outlets, a swimming pool and a gym.