AccorInvest wants to sell more than $2 billion of hotels in Europe and Latin America and extend the maturity of more than $4 billion of debt.
AccorInvest is a hotel owner and operator that, as of September, runs about 750 hotels. Accor, on the other hand, creates and manages brands and a loyalty program while also offering technology and other services.
Los Angeles’ city council appeared this week to have reached a political compromise with the local hotel workers’s union about a controversial plan to mandate that hotels temporarily house the homeless.
At issue is a long-running dispute. Earlier this year, LA’s powerful hotel union, Unite Here Local 11, successfully pushed the city’s council to put an initiative on the ballot for voters in March 2024. One of the initiative’s most controversial proposals was to mandate that hotel operators take part in a city program to place the homeless in otherwise vacant hotel rooms temporarily.
Hotel operators would have to report daily on their vacancy rate and had to accept temporary housing vouchers to cover the cost of temporarily housing the homeless.
As of Friday, a proposal that removed the homeless mandate was still two votes short of passage in the L.A. City Council, reported the Los Angeles Times, but political insiders said they were optimistic. The California Hotel & Lodging Association and the Hotel Association of Los Angeles supported the compromise, which they helped facilitate along with council member Traci Park, Council President Paul Krekorian, and others.
Unite Here Local 11 said it considered the deal a victory. The pact includes the City Council promising to okay a set of fresh regulations on hotel development that would tighten the standards for the approval process to link hotel creation with the parallel creation of residential housing construction. Other criteria include vetting whether there is enough demand to support the hotels and what side effects development may have on the local demand for childcare and other city services.
“We have said all along that our contract campaign has been about two things: housing for our members where they work and a living wage,” said Kurt Petersen, the union’s co-president, in a statement.
Himmat Anand had led the Tree of Life for about 15 years. Ambuja Neotia has named Vinoth Ram as the new CEO.
“The Tree of Life brand architecture is perfectly poised to cater to the discernible shift in leisure travel trends, said CEO Vinoth Ram. “My primary objective is to expand the brand’s presence throughout this vast and diverse country, providing an array of unique and exceptional experiences.”
If you want to enter the hospitality sector, start small and get financial support. But be aware that scaling up beyond a certain threshold can be tremendously hard.
That was the advice from the head of one of the world’s largest hotel groups, Accor chairman and group CEO Sébastien Bazin.
“If it’s your dream or passion, just do it and make sure somebody actually helps you financially to do it, Bazin said. “Start with three, four, or five six bedrooms. Be authentic, be sincere, be warm, and welcoming.”
“The difficulty is not to start but to scale,” Bazin said. “To go from one hotel to 12 hotels.”
Accor’s leader said that it’s quite difficult for entrepreneurs to scale up hotel businesses above a certain level, partly because they need to rely on third-party middlemen for distribution to fill their rooms.
“They don’t have the size, and the tendency is to go to the online travel agencies, and they’re going to be eating your lunch,” Bazin said. “Then you have the big gorillas like me knocking on the door, and you’re going to end up working for Accor.”
“Many people have [created regional hotel groups] but could not grow them further,” Bazin said. “It’s a tough business in which you have some tough big guys who really don’t like you to grow that much.”
Advice to Hoteliers, Too
Bazin was also asked about what was something he “hates” about the hotel industry from the personal perspective of being a traveler. He said it was the trouble the hotel sector had in giving its young employees the resources, training, and support they need to thrive in their front-line and behind-the-scenes jobs.
“I was staying at a hotel, and this morning I went to check out, and there was a very young, nice gentleman,” Bazin said. “He must have been 22 or 23 years old — impeccably dressed. And he was in a total panic.”
“He just didn’t have the proper training,” Bazin said. “I don’t like it when people in front of you lose their self-esteem because they cannot operate the way they should operate, and it’s not their fault.”
“We as industry leaders should be better equipping and training our people and giving them what expertise they need,” Bazin said. “Our industry will be stronger if we have hundreds of thousands of different young people who probably never went to college, and we give them chances in life.”
The Dallas area has topped national rankings for hotel development for more than a year as the Texas capital enjoys a hotel building boom.
The Dallas area hit a pipeline record, with roughly 80 hotels with a total of 9,021 rooms slated to begin construction in the next year, according to research firm Lodging Econometrics. For context, the U.S. as a whole has opened roughly 40,000 rooms in the past year.
“Dallas also leads the top five U.S. markets with the greatest number of projects in the early planning stage at the end of the third quarter,” Lodging Econometrics said.
Choice Hotels on Wednesday called on Wyndham Hotels & Resorts to return to merger talks while publicly responding to concerns Wyndham executives had raised about “execution risk” — including questions about regulatory scrutiny.
Choice Hotels executives also noted that major hotel groups such as Hilton, Hyatt, and Marriott have this year announced new brands to compete in the premium economy and midscale segments. This fresh rivalry would add to the competitive landscape already featuring Best Western, Extended Stay America, G6 (Motel 6), Oyo, Red Roof Inn, and Sonesta.
Choice Hotels’ comments came on the same afternoon that Wyndham executives issued a release reiterating their disinterest in talks. It also came a day ahead of Wyndham’s earnings call.
Accor has signaled over several years that it plans to become more asset-light. Bloomberg News reports that the Paris-based hotel giant is about to take more steps as its owner-operator arm sells hotels.
AccorInvest, a hotel owner-operator company created in 2017, wants to sell more than $2 billion (about €2 billion) of hotels in Europe and Latin America, sources told Bloomberg.
AccorInvest is a hotel owner and operator that, as of September, runs 753 hotels. Accor creates and manages brands and a loyalty program while offering technology and other services.
Sources told Bloomberg that AccorInvest has properties under the Sofitel brand in Paris for sale, along with five Ibis hotels in Britain, a hotel in the Netherlands, a Sofitel in central Europe, and some other properties.
The money will at least partly be used to pay off debts, Bloomberg said.
California Governor Gavin Newsom signed into law on October 7 a bill to ban mandatory hidden fees — also called junk fees — starting July 1, 2024.
“The price Californians see will be the price they pay,” said RobBonta, the state attorney general.
As Skift previewed, the law broadly requires upfront disclosure of any mandatory fees by hotel companies, online travel agencies, car rental companies, online concert ticket sellers, and others.
If a company doesn’t comply, a consumer could seek “at least $1,000” in damages via the state’s existing consumer protection claims processes. (See the law, embedded below.)
Junk Fee Reform
It’s unclear how California’s new law will impact companies in mid-2024.
California has the largest population of any state in the U.S., and so some big companies choose to apply its requirements nationally.
Yet there could be lawsuits from industry groups, and corporations could find workarounds to keep profitable fees. California has rules on fees for car rentals, but many online travel agencies choose to display those fees in ways that vary depending on jurisdiction.
Another wrinkle: Newsom hasn’t yet taken a position on another bill awaiting his signature, Senate Bill 537. He has until Saturday night to decide whether to let that bill pass into law. The bill would prohibit businesses that sell lodging for up to 30 days in California from displaying a room rate that doesn’t include all fees or charges (except government-imposed taxes) as of July 1, 2024.
It’s possible the Governor may feel the bill he’s signed already covers this, making a law specific to hotels unnecessary. Either way, the state’s 6,000 hotels and thousands of short-term rentals are currently facing new rules about the display of so-called junk fees, such as resort fees and housekeeping fees.
Michelin Guide, whose star ratings are coveted by restaurants worldwide, said on Thursday it would begin designating “the most exceptional hotels.”
Like with the restaurant rankings, Michelin intends to create a stir by revealing its list of hotels at a ceremony in the first half of 2024.
Unlike its restaurant ratings, Michelin will award its favorites “keys” instead of stars. Michelin will judge hotels by criteria including local character, design, decor, and amenities — among other factors.
Michelin bought the online travel agency Tablet Hotels in 2018. The site’s hotel vetters use guest reviews to help evaluate hotels. For several weeks now, the Guide has been offering a selection of over 5,000 hotels globally on its site, long-listed from top-reviewed properties on Tablet Hotels. This long list of about 5,000 hotels will be the ones Michelin reviewers will use to award “keys.”
Generator Group, which owns or runs 21 hotels, gave a financial update on Monday that underscored the post-pandemic boom in travel.
London-based Generator Group forecasted that it’s on track to produce revenues of about $238 million (€225 million) this year — which would represent a 25% jump over the company’s revenue in the pre-pandemic year of 2019.
The privately held company anticipates this year it will produce earnings before interest, tax, depreciation, and amortization of about $80 million (€75 million). That would represent a 50% jump in earnings compared with 2019 — highlighting strong pricing power in so-called “compression,” or high-demand, markets.
Private equity firm Queensgate Investments bought Generator for $480 million (€450 million) in 2017, and the group’s flagship brand is Generator, a set of premium economy hostels. Queensgate spent about $400 million in 2019 to acquire Freehand Hotels, which operates properties in New York, Chicago, Los Angeles, and Miami, and folded that into the group.
Generator said it has nearly 12,000 beds in ten countries. It told the Financial Times, “in the next year, it is planning to launch 10 more sites worldwide under an asset-light model where it does not own the long-term lease, including a new hostel in Bangkok.”