A glimpse at the roadmap of the multi-brand hospitality chain
Leading from the front, Jean-Michel Cassé, Chief Operating Officer, India & South Asia, has been the face of AccorHotels in the region and also the force behind the growth of this rapidly expanding brand. TravelScapes in a one-on-one with this charismatic leader finds out about the journey of AccorHotels, its latest associations and more.
Gurpreet K Sekhon
Congratulations on AccorHotels completing 10 years in India last year, how has the journey been?
We started out in India over a decade back, with Novotel Hyderabad Convention Centre. At the end of 2016 we had 45 hotels. When we look at our competitors and the time it has taken them to get here, I can safely say it has been a very good journey.
At the outset, we realised that if we need to develop fast, and with quality in India, we need to invest and with the right partner. Also, the partner needs to lead the investment and most of all we have to ensure, it is a quality partner.
I have to say, our first association with InterGlobe Enterprises has been setting the base for that growth at that speed of development.
The global economy was under pressure since 2008 and the Indian economy was no exception, however the last three years have seen a recovery and occupancies are back up to 60 per cent, which is good.
The need of the hour is to see a recovery in the Average Room Rates. When you see the quality offered by the Indian hotel industry and compare it with what is offered for the price globally, the price commanded is very low as compared to the quality of the offer.
We have taken steps in 2017, in order to turn around that phenomenon and ensure a recovery in the ARRs.
AccorHotels does not have a large presence when it comes to luxury hotels, is that going to change after the acquisition of Fairmont Raffles Hotels International?
Today we have 10 brands, with 47 hotels the 48th slated to open soon.
Amongst these 10 brands, the priority and focus has been on the business hotel brands Novotel which is mid-scale and in some cases mid-scale to upscale and the economy brand ibis. This is our priority and where the market is today, as per my belief.
These two brands are quite successful and we are very happy about the positioning and the differentiators between the one and the other, so these remain the key and the base of development. In the case of ibis what we want to do in terms of development, in cities like Delhi or Mumbai, is densification. One or two ibis are not enough for these cities given the size, hence we want to go in for more hotels. To summarise, in key cities, we want more numbers of the same brand in the economy and mid-scale segments, densification works best and that is what we want to do.
That said, the acquisition of Fairmont, Raffles and Swissôtel is going to open up a host of opportunities for us. We already had a Sofitel in Mumbai and a Pullman in Delhi, now we have a Fairmont in Jaipur and a Swissôtel in Kolkata. It is increasing our visibility in the upper upscale and luxury segments and indeed these brands are giving us many opportunities in bringing other hotels of the same brands to India, as well as densification. So while opportunities are opening up with the acquisition of FRHI, it is too soon to say more. All I can say is, we believe that in this year, we shall be able to convert some of the signings of these brands.
Could you also tell us about your recent acquisition of Banyan Tree and 25hours?
With respect to the recent acquisition of Banyan Tree and 25hours, it is not a complete acquisition ¬but an association. We have minority share in these companies but the beauty of it is, they are joining our loyalty program, our digital platform and our global distribution which means we have increased our number of customers and our visibility globally for AccorHotels. These are unique and amazing products and great additions to our portfolio.
Talking of positioning, Banyan Tree is five star and purely a quality resort. This is one brand we would be aiming to bring to India and we are pitching for the same. It is new, but, given my understanding of leisure and the potential it holds, I believe that Banyan Tree shall open up some excellent opportunities for us.
25hours is a bit of a different story. It is a very European brand and is trendy, quirky, very fashionable and all about F&B. Infact, it has become a sought-after F&B destination. When we got thinking about the importance of F&B in India, we realised that we have a brand in Europe that is a quality F&B destination. In cognisance of the potential interest that it would generate in the India market, we are determined to pitch for this brand. Looking at how successful 25hours is, in terms of F&B in the European market where people typically prefer stand-alone restaurants over hotels; we are convinced that it would do really well in India.
What are the timelines that you are looking at? What cities are you planning to launch these brands in?
It is too early to talk about timelines, as these are very recent acquisitions. These are in our portfolio and have seen expression of interest both from our existing partners as well as new ones. We have initiated conversations but there is bound to be a gestation period before things come to fruition.
Talking about cities, when we talk about 25hours, since it is trendy, quirky and fashionable, whenever we decide to launch it in India, Mumbai would be the ideal choice.
Coming back to Banyan Tree, a place like Goa would probably be the right place to start, provided we get the right site.
Lots of brands new have recently made an entry in India and lots more are pitching for the same. How do you plan to retain your identity in this brand clutter and how does your loyalty program play a role?
Loyalty definitely is the base. I was looking at a presentation made by my colleagues in 2001. Back then, India had 10 brands mostly domestic. Today there are 70 brands, the landscape is confusing but at the end of the day, there is coherence, a consistency. We at AccorHotels are very confident about our brands as they are very distinct, from one another.
I can’t say the consistency is the same everywhere, but our customers are very clear. They know what a Sofitel is, what a Pullman and what a Novotel is. Our travellers are aware and well- travelled. The Le Club AccorHotels – loyalty program, our mobile application and digital platform immediately help you understand what one brand is compared to the other in terms of the location, brand positioning and more.
Now whether there are two brands or more in the global landscape, it does not matter because the customers are becoming increasingly diverse and there is a brand, at the end of the day, for every single person. Hence whether it is too many brands or not, I feel each has a place in the market. No brand operator would be able to create a brand that lacks a market.
Lets take the example of 25hours Hotel Bikini Berlin, where even on a Monday night, traditionally the weakest night of the week, people are queue up for the rooftop bar. The brand may not be catering to everyone, but a specific group who would want to be there. So every hotelier, for every brand, is trying to create a story that goes with it.
Our belief is that other than the room, that may be the same across many brands, what is important is the emotional connect that you get with your customers. So today, the big fight is to get our story right and those who do not get it right may not get the attention of their customers.
On a concluding note, what do you foresee as the future of Hospitality in India?
We have never been concerned about the future of hospitality in India. There are new entrants in the market every year, whatever the sector. In our case, Formule1 would be the first hotel, when one graduates from a guest house. Once he is a little more resourceful, he would move to an ibis. There is enough number of customers here as well as new entrants. Eighty per cent of our customers are Indians; we are not building hotels for foreigners and it is different for different brands. In Formule1, 99 per cent of the customers are Indian. So that brand has been created and customised for Indians. The Indian economy is surging and is going to support all the growth. We cannot compare ourselves to China or France as each has a different development pattern. Talking of India and where we are today, there is an amazing future.