AccorHotels' growth plan for Fairmont comes more in focus

The Sofitel Copacabana in Rio de Janeiro will convert to the Fairmont brand. (The Sofitel Copacabana will convert to the Fairmont brand)

The bulk of Fairmont Hotels & Resorts properties are in the U.S., Canada and Europe and expanding the brand by way of new development could be difficult in this current market of tighter lending—especially for luxury product. In light of a tougher debt environment, AccorHotels, which finalized its deal for FRHI Hotels & Resorts last July, is taking a tack of converting existing hotels, particularly in destinations where it doesn't have prior exposure.

The latest example of that is in South America, where AccorHotels will convert the Sofitel Copacabana into a Fairmont, the first Fairmont-branded hotel in South America. A renovation by architect Patricia Anastassiadis will begin this month and is expected to finish in a little more than a year's time. All the hotel's 400 rooms will be fully renovated, in addition to an 800-seat convention hall. The renovation will also feature a new pool area and spa.

The cost of the renovation is pegged at R $250 million or approximately USD $75 million. According to its website, the hotel is currently closed for the refurbishment. 

According to Philippe Trapp, SVP of LUXE brands for AccorHotels South America, converting the Sofitel to the Fairmont flag was a strategic choice made by AccorHotels to separate itself from the market. "The idea in this case it is to differentiate ourselves from the competition, mainly with a modern and elaborated design, sophisticated gastronomy and trendsetting technology," he said. "Fairmont is the perfect brand to bring this kind of innovation to the market and elevate our current luxury offering in Brazil. [The] conversion makes sense because of several particular existent conditions within that context, considering the city, specific audience, etc. The hotel will certainly bring even more visibility to the city and the region, attracting tourists from all over the world."

With regard to the design brief attached to the renovation, Trapp said the new Fairmont "will reflect the 'Carioca' soul in its surroundings." (A Carioca is a native of Rio de Janeiro.) 

Similar to this undertaking, AccorHotels also struck a deal in April to convert the Royal Palm Marrakech to the Fairmont Royal Palm Marrakech. “Morocco is a strategic market for us and one in which we are witnessing solid growth and momentum. With 37 hotels currently within our portfolio, we look forward to complementing the country’s already robust tourism development plan, and to reinforce our global development objective for Africa overall by doubling our network to reach 200 hotels," said Olivier Granet, COO and managing director of AccorHotels Middle East & Africa, at the time of the announcement. 

Meanwhile, while the Sofitel brand will go away in Copacabana, it is getting a facelift in Ipanema after the investment of R$30 million or USD $9.7 million toward the refurbishment of the Ceasar Park Rio de Janeiro Ipanema, a Sofitel hotel.

"This transformation is part of AccorHotels ambitious project to make Sofitel Ipanema one of the best luxury hotels in Rio and in Brazil," said Mendes.

According to Trapp, conversion decisions will be made on a case-by-case basis, "considering the several variables of the project at hand."

In Brazil, according to Trapp, between 2012 and 2016, AccorHotels had 25 openings in Rio de Janeiro, increasing its hotel count from eight to 32 hotels. AccorHotels presence throughout Brazil remains strong, Trapp mentioned: Out of the 289 hotels in operation in South America, the vast sum—252—are in the country.

"By 2020, the goal is to reach 500 hotels in the region," Trapp continued. "The Fairmont portfolio, for instance, has 70 hotels worldwide in 22 countries and so there are always possible conversions or new developments to be executed."