Accor Aims to Grow Luxury Brands in North America

Accor, the France-based global hotel group, will continue to grow its luxury brands in North America and expand its all-inclusive product in Central America and elsewhere under multiple brands, according to Sébastien Bazin, CEO, speaking at a press event.

The always outspoken executive said the travel trade should consider Accor "their best partners" because of the nature and diversity of the group's brands. He quipped that he had never attended the annual Virtuoso conference, "because I am a Frenchman, and it takes place in August."

Looking back, Bazin said that Accor has spent the last eight years “doing the dirty work” of amassing 47 brands and is now in a good position to satisfy any traveler’s needs. He is optimistic about the growth of global tourism because of the emergence of the middle classes and the development of air travel. 

Asked about geopolitical issues, Bazin said, “As a Frenchman I am concerned but as CEO of Accor, I am not.” He explained, "Europe will continue to welcome  Americans and America will continue to welcome Europeans.”

He said that he is not concerned about the imposition of tariffs because Accor is a service company that does not buy or sell goods, so tariffs would not impact it. 

While Accor has many midscale and limited service brands, said Bazin, the company will not grow those products in North America because the major brands here – including Marriott, Hilton, Wyndham and Choice – dominate the market and do a good job. However, he said the company’s luxury brands will continue to grow. He said the Raffles in Boston, which opened a couple of years ago, has been an “incredible success” and drives the highest rates in that city.

There will be fewer than a dozen Raffles locations in North America, said Bazin, and they will not be in secondary or tertiary cities. He said there had been doubts in the industry about the first Raffles in North America being a high-rise skyscraper because of the brand’s long heritage. But he added, “We were daring and we don’t regret it although we were stretching the brand.”

According to Omer Acar, CEO of Raffles & Fairmont, the company is in advanced discussions for Raffles in Beverly Hills, Miami and Mayakoba in Mexico. Announcements, he said, will come in the next quarter or two.

Bazin said the company also hopes to add hotels and ski resorts under the Fairmont brand. The Fairmont Breakers Long Beach, which opened in November, said Bazin is a model for what that brand will be. He said Fairmont  “is a very solid MICE (meetings, incentives, conferences and expositions) product.”

While he does not think Accor can compete in some categories in regions like North America and China, Bazin said the company is the dominant player worldwide and will continue to grow in Africa, Asia, Australia, and elsewhere. “We have 350,000 rooms in Europe,” he said, “more than the next three biggest companies combined.”

There are discussions, said Bazin, about expanding lifestyle brands in the U.S. He noted that  Ennismore, which is in a joint venture with Accor, has 17 lifestyle brands, including some that started in the U.S. like Mondrian, Delano and SLS. He added that there might be an opportunity to develop those brands in the U.S. market. 

As for all-inclusives, said Bazin, that product calls for a different kind of expertise, so Accor will rely on the management capabilities of Rixos Hotels, part of a joint venture with Accor. He said there is now an SLS all-inclusive in Cancun “that is succeeding beyond our expectations.” He said that there are six or seven brands that would be viable for all-inclusive.“ We only realized five or six years ago,” said Bazin, “what a fabulous business all-inclusives are.” 

Bazin said that international long-haul business travel has been reduced by a third after the pandemic because of Zoom and TEAMS. He said a CEO would tell employees to start with Zoom and TEAMS and then decide if a trip would be worthwhile. However, he added, "There are fewer trips but the stays are longer.”

On AI, Bazin said that Accor has been working with technology companies that have been deploying AI for a decade. However, he said, it is too early to see how it will play out – whether it will impact Expedia and Booking.com more or hotel operators. “It will be big but not devastating,” said Bazin, adding,  “we have to pick the right horse or horses to partner with.”

Bazin said loyalty programs are probably the best tool for interacting with customers and that Accor's programs are about to reach 100 million members, with 11 million added last year. He said loyalty members spend twice as much and stay 50 percent longer. 

Bazin also noted that Accor is getting into the cruise business with two Orient Express yachts on order and two more options. He said he has been spending a "disproportionate" amount of time on the Orient Express brand because it’s his “baby.” He said the company would wait to see how this goes before moving on to other cruise brands.

In the past, said Bazin, Accor used to open 365 hotels a year and now opens 300 because the emphasis is on opening profitable properties. He also said that sustainability is key with the company balancing how much a hotel costs a community in terms of resources like electricity and water and how much it contributes in terms of jobs and economic impact. “The positive has to outweigh the negative,” he said.

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