Adagio recently presented excellent results for 2023, with occupancy close to 80%. What can you expect in 2024?
Xavier Desaulles - First of all, a return to normal. Indeed, with an occupancy rate of 79% in 2023, it will be difficult to do much better in terms of occupancy, while at the same time prices will follow a gradual increase. As a result, we are forecasting growth in revenue per room of of the order of +6% to +7% in 2024. All of this will be boosted by favourable events in the leisure sector - which currently accounts for half of our customer base - with the May bank holidays lined up nicely and, of course, the Olympic Games in July. As far as business customers are concerned, we will benefit in particular, as we will in 2023, from the rescheduling of a number of international events. At the same time, we are also seeing some changes in the corporate customer base.
More specifically, what are these developments and are they good for you?
Xavier Desaulles - Some of them do, like 'comuting', those people who have moved to Bordeaux or Rennes post Covid and have to return several times a month to their company headquarters, whether in La Défense or elsewhere. Travellers for whom staying in a traditional hotel is not necessarily the most practical option. At the same time, some of our traditional customers are less present. These include the business of IT services companies has been turned upside down during the crisisWith increasing use of distance learning. Consultants who used to come from far away, particularly from India, are now spending less time with their customers. Instead of staying for two or three months at a time, they come at more frequent intervals, two weeks at the beginning and at the end of the assignment, and the rest is done remotely. As a result, we have to look for other B2B sectors to whom we can promote the benefits of the aparthotel sector, in particular the sliding scale of charges and the advantages of our fully-equipped flats. And we're doing this by turning to the media, production companies and SMEs, for example, who didn't know about us before.
You mentioned SMEs. Most hotel groups are trying to attract this business clientele, which has been the most dynamic since the end of the pandemic. Were they already present at Adagio?
Xavier Desaulles - SMEs are a really important source of customers for us. They were present, but we have set up a local canvassing programme to strengthen this segment. Especially since, with our network of 40 aparthotels in the regions, we can offer them a local service. So, alongside our centralised sales force, the managers of our establishments aim to recruit these local players. And the momentum is good, because this business, which was fairly weak before, has now tripled.
After these changes, let's take a look at Adagio's offering. Is your new brand image, introduced last year, an asset in attracting corporate customers?
Xavier Desaulles - It is important to show our B2B customers that Adagio is a dynamic brand. A great deal of work has gone into differentiating it from the competition and raising its profile, notably through partnerships with La Défense Arena and the sponsorship of skipper Éric Péron for the Arkea Ultim Challenge-Brest ocean race. For enhance our B2B approachLast year, we also set up a watchdog organisation bringing together around ten principals. These are customers and intermediaries whom we have brought together to give them the opportunity to express their needs and expectations, for example in terms of the speed and quality of responses from our sales department. At the same time, we completely overhauled the ergonomics of our website last year, particularly the corporate section, by adding information on a number of benefits that were not sufficiently highlighted before. For example, the proximity of public transport, the facilities available in the flats - all these little things may seem anecdotal, but they are essential for the buyer.
CSR is also a major issue for companies. What progress has your Group made in this area?
Xavier Desaulles - We are continuing to work on our CSR dimension, both out of conviction, but also because B2B principals want to know what our CSR commitments are before they can bid on tenders. If you don't have a somewhat systematic approach to this subject, you're no longer in the competition game. This is one of the reasons why we have embarked on a systematic labelling process, with the aim of seeing half of our network certified. Green Key certifiedincluding 36 sites in France and ten more abroad by 2024. At the same time, our network's energy consumption fell - and this is a record - by 11% last year, thanks in particular to an effort to raise our customers' awareness, by inviting them to limit heating to 19° in winter, to close curtains in summer to protect flats from the sun and to air-condition a little less. These are fairly simple gestures.
Among your other initiatives, Adagio has embarked on a programme to renovate its establishments. What progress has been made?
Xavier Desaulles - The aim of this renovation programme is to give our network a consistent experience from one destination to another, from one Adagio Access or Adagio Original to another. Two years ago, we identified thirty sites to be renovated as a priorityAparthotels, with a five-year timetable. Five aparthotels were renovated last year, seven more sites will be renovated this year and so on, all with redesigned flats and communal areas. To achieve this, we are relying on half a dozen design concepts per range. These concepts have been tried and tested, and are deployed according to the different circumstances.
Your network has also expanded to include new establishments. Could you tell us about these openings?
Xavier Desaulles - We opened five sites last year, including several in France, with the first in Montpellier, a second in Lyon and a fourth in Toulouse, making this city our leading regional centre in France. At the same time, two new sites opened in Belgium, in Antwerp and Ghent. Both are "combo where an Adagio aparthotel is associated with one of our partner Accor's brands, Ibis Styles in this case. It's a solution that I find quite 'smart': rather than a single traditional hotel with 250 rooms, the owner has the advantage of having a product based on different clienteles, united around the same reception and shared services. And it works very well. In fact, we will continue to open other projects of this type this year, an Adagio Access in Rouen and an Adagio Original in Abidjan, both in combination with Novotel and expected this summer.
What other openings are planned for 2024?
Xavier Desaulles - A total of seven new establishments are on the programme for the year. In addition to the sites in Rouen and Abidjan, next month we will open the Adagio Original Porte de Camargue, near Arles. We also have an Adagio Access at Brussels airport and an Adagio Original near Heidelberg station, in Germany. Another four-star establishment will open, hopefully before the Olympic Games, next to the Seine Musicale in Boulogne-Billancourt. And finally, we will be opening a flagship store in the heart of LondonIn the Whitechapel district, with 147 flats and a coliving offer per floor. In other words, five spaces integrating the concept tested at Paris BercyThis is an ideal solution for extended families or groups of friends, but also for business groups such as management teams. This solution is designed for extended families or groups of friends, as well as business groups such as management teams.
You're aiming for a total of 200 sites over the next few years, starting in Africa this year and China next year. Is Adagio's development looking to other horizons?
Xavier Desaulles - Our preserve is still the major European countries, where we have great potential for development. We have still in reserve in France We are not present - or are under-represented - in a number of cities such as Bordeaux, Lyon and Nantes. But we are also seeing demand in more distant geographies such as Eastern Europe, Africa and China. In Africa, we have plans for a second site in Casablanca, as well as a other aparthotel in Abidjan with Accor's partner in Africa Kasada. Kinshasa is also on our radar. At the same time, we will be opening our first test site in China in 2025 in Chengdu, Sichuan. If the experience is conclusive, we have already identified another major project in this province.
We can't talk about 2024 without talking about the Olympic Games. How is this event shaping up in your schools?
Xavier Desaulles - Today, our sites involved in the event have booked around 60%. In a few figures, 21 of our Adagio hotels are part of the framework agreement defined between Accor and the Olympic Games Committee, with a significant proportion of the inventory made available to Accor. providers of the Olympic Games in particular. But there are also some twenty other sites involved in the event, and these aparthotels could be of interest to people who want to stay a little way from the Games area. These include sites in the Île-de-France region, such as Val d'Europe, and regional sites such as Marseille and Lille, which will be hosting events.
Will business travellers be accommodated during this period?
Xavier Desaulles - During this rather special period, we will be welcoming two types of customer: firstly, more international leisure travellers. But we mustn't forget our corporate customers who have to come to work in the Paris Region during this period, despite all the constraints. We have to remain loyal to those who are loyal to us throughout the year. That's why we've been careful to set aside quotas for what we call "through stays", i.e. stays that overlap with the Olympic period. Quotas in the region of a quarter of the inventory.
In your opinion, given the crowds expected in Paris this summer, should we expect to see a shift in customer numbers before or after the event?
Xavier Desaulles - It's a risk, absolutely. The Games have a knock-on effect that should not be underestimated. We can expect some travellers not to come to Paris the week before or after the Games. due to expected disruptions. But there are some business activities that can only be carried out face-to-face, where presence at head office can be essential. Hence the need to be able to accommodate them, especially as the framework contracts with the companies stipulate that there are no "black out dates".
