How is the new organisation of the Accor group playing out on the sales side, with the group now split into two divisions, one for economy, mid-range and premium hotels and the other for the luxury and lifestyle segments?
Sophie Hulgard - First of all, it should be pointed out that our sales department is one of the only ones to have a scope covering all our brands. It wouldn't make sense for a major customer to be offered this or that budget or premium hotel, and not the Fairmont, Hoxton, Sofitel or SLS. On the other hand, we have created a new entity that manages roughly 200 major international accountsThese are customers whose needs are spread around the world. Then, one notch below, our four regional hubs manage their own customers, some of whom may be very large customers for Accor, but who are very local. I'm thinking for example of Deutsche Bahn in Germany, whose expectations are essentially domestic. Everything is in the process of being put in place, but we have a clear idea of the most interesting organisation for our customers.
Could this new organisation also have an effect on your brands' MICE offering, i.e. the offering dedicated to meetings and events?
Sophie Hulgard - Under this new organisation, each brand will have a more clearly defined offering. Some will be much more focused on individual customers, while others will be more MICE-oriented, like Pullman for example. Our ambition is to develop this brand as one of our flagship brands for large meetingsWith large rooms and beautiful ballrooms. Novotel will always be an important brand for meetings, but with less capacity than Pullman. As for our luxury brands such as Sofitel and Fairmont, their proposals will be more specific. While Fairmont hotels are already used to hosting major prestige events, Sofitel is moving towards tailor-made, personalised events. This more clearly defined offering will enable us to better explain our brands to our customers. It will then be easier for them to understand where to organise such and such a meeting, such and such a type of event.
How are you going to clarify your brand offering?
Sophie Hulgard - Our MICE offer is still very much linked to what each hotel has to offer. We would like it to be much clearer for an entire brand. Hence the redefining standardsLike Fairmont, which is ahead of the game in this respect. Pullman had some, but they're no longer up to date and we're in the process of completely overhauling them. This redefinition of MICE standards is one of my priorities in the years to come. Probably not for our 46 brands, but at least for our two iconic brands, Novotel and Pullman, and our premium brands. It's a big operational challenge.
Do lifestyle brands, which have been one of your Group's strong points in recent years, also have a place in this context?
Sophie Hulgard - It would be interesting to develop meetings & events tailored to their needs. What the individual traveller is looking for at Mama Shelter, 25Hours or The Hoxton - a unique spirit, a personality specific to each establishment - could be applied to meetings and events. Take 25Hours, they don't all have meeting spaces, but here they do, they're very creative, very lounge-like, different from what you see elsewhere. By working with our lifestyle brands to develop a MICE offering, we would probably be closer to what Châteauform' offers than Novotel. We could recreate this kind of strong, refined concept in our own way in our lifestyle hotels, in a different form.
Let's talk about business customers in general. Has the corporate market returned to pre-pandemic levels?
Sophie Hulgard - As far as individual business travel is concerned, we have practically returned to equilibrium, with a slight gap of -5% worldwide. But remember, we were saying at the time that business travel would never return to the same level, or at best not before 2025. So it's quite positive, especially as, alongside the increase in hotel occupancy, we have achieved higher revenues than in 2019 thanks to higher room rates. This rate growth is in line with the rise in costs for our hotels, particularly energy and wages. This is generally well accepted by our customers, who apply it to their own products. What's more, given these higher prices, we were expecting to see a move downmarket, with customers used to staying in four-star hotels, for example, switching to three-star Ibis hotels. This has not been the case. Our customers have absorbed the rise in prices by travelling a little less.
What are you looking forward to in the year ahead?
Sophie Hulgard - I think things will stabilise. Our customers are all more or less back to where they were in 2019. The pace of business travel should remain the same next year. On the other hand a little uncertainty about the groups in 2024. According to analyst STR, demand in the United States, which exploded just after the restrictions were lifted, is now slowing down.
Is this due to a decline in the 'teleworking' effect, which has supported the need to bring teams together?
Sophie Hulgard - The development of teleworking is helping to ensure that we remain below the 2019 level for overnight stays generated by individual travellers. But it has no influence on demand from groups. Quite the opposite, in fact, the need to get together is always strong. Travel for seminars and conferences continues to grow. However, I don't think that the downturn mentioned by STR is untrue. There is still a catch-up effect from events cancelled in 2020 and 2021. In the end, even if we stay at this level, it's very acceptable, especially as we often reach saturation point in June and September, the big months for meetings.
Coming back to teleworking, some analysts were talking about a new trend, with weekend days, traditionally less frequented, now more in demand. Are you seeing any evidence of this?
Sophie Hulgard - The STR statistics clearly show this, with peaks on Fridays and MondaysThese are days that we didn't sell to business travellers before. Now, these are big days, whereas in the middle of the week, hotels find it harder to fill up. Today, people don't need to be in the office on Mondays and Fridays. Hence the growing development of bleisure with long weekends combining teleworking on Fridays and Mondays and leisure activities on Saturdays and Sundays.
Office life is now concentrated on mid-week days. Could this also have an impact on the organisation of meetings?
Sophie Hulgard - It's true that we're now seeing more and more requests from groups for Thursdays and Fridays, whereaswe used to avoid Fridays at all costs to give participants time to get home on Friday evening. There's more flexibility here. I myself never used to schedule meetings at the end of the week, but now I sometimes ask my teams if they would like to finish a meeting on Friday evening, so that I can extend it over the weekend.
Another current trend: is CSR becoming a key argument for attracting meeting and event organisers?
Sophie Hulgard - According to one of our client agencies, with whom I was talking recently, their clients want to see this aspect taken into account in calls for tender. But if they find a better price elsewhere, they are not closed to this kind of proposal. However, it's not impossible, I have a feeling that's about to changeAccor has the advantage of having already done so in the past. Accor has the advantage of having already done giant steps forward in this area, but there's still a lot to do as far as meetings are concerned. For example, I'd like to be able to show customers that their event would be much more eco-responsible if they chose this or that option, why not push for vegetarian offers.
Is the trend, mooted during the pandemic, for several regional meetings to replace the major annual convention taking shape?
Sophie Hulgard - I don't get that impression. I rather think that companies avoid holding big meetings, limit the number of participants and travel holding the event one year in Europe, the next in the United States. More and more smaller meetings and events are also being organised within the same country. This is interesting for our big markets like France, Germany and the UK.
Let's move on to an old chestnut: online booking of meetings. Where do we stand today?
Sophie Hulgard - Everyone knows how to block off 10 rooms, but for everything else - breaks and meals, meeting spaces and room layouts - we're still finding it very hard to do. This will be the real big step. But it will only be useful if we manage to make an 'end-to-end' request, i.e. an online request for a group including rooms, catering and room reservations, all with immediate confirmation. Some players are proposing solutions, but nobody does it really well. There is as yet no truly solid offering. A platform like Groups360 (editor's note: in which Accor is a shareholder along with Marriott, Hilton and IHG) is quite successful in the United States, although I'm not sure it's direct reservations at 100%. And their offer is not perfectly adapted to demand in Europe. So, as everyone is late anyway, we are observing the market before being able to offer the most appropriate solution for our hotels.
So there's a good chance we'll be talking about this again in five years' time?
Sophie Hulgard - Something really has to happen. This is where artificial intelligence could help us to automate certain things more easily. So I hope I don't have to wait another five years! Possibly next year.
