Video: At IHIF, AccorHotels' CEO explains how he stays ahead of the curve

BERLIN, Germany — Of all the global hotel companies, Paris-based AccorHotels is the one betting that traditional lodging is not the future. Investments in home-sharing, private rentals, digital concierge and alternative accommodation-type brand launches are evidence of this non-traditional trajectory.

Leading this unorthodox expansion is CEO Sébastien Bazin, and his talk at the International Hotel Investment Forum, here at the InterContinental Berlin, was proof that he believes the hotel company of the future cannot be one-dimensional.

AccorHotels is proof of that.

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"We have never been stronger than today," Bazin told IHIF delegates during morning talk on the digital revolution and hotel group models. "We can do whatever we want to do opportunity wise with our balance sheet."

One of AccorHotels' first steps in reengineering itself was to take up an asset-light model, which is preferred by global hotel companies today. Why? "Financial investors and equity analysts do not understand how to valuate hospitality," Bazin said.

Last July, AccorHotels announced a plan to turn its HotelInvest property business into a subsidiary and opening it to third-party investors. 

AccorHotels said HotelInvest had a gross asset value of €7 billion in 2015, and Bazin said he expected as much as $5 billion in cash proceeds. 

The plan, expected to be completed by the end of the first half of this year, would give AccorHotels greater freedom of growth. "I can't invest in real estate and technology and technology at the same time," Bazin said.

New Way of Thinking

Bazin is hyper-sensitive to trends and businesses that play in and impact his space. Distribution is always top of mind—and Bazin watches them like a hawk.

"I need to watch the OTAs: When they grow they take something away from me, but they also bring me traffic," he said, a nod to the duality of OTAs, the good and the bad. 

"Every year that passes, OTAs are growing three to four times faster than we are," he said. "It means you need to tap into what they do. Think differently and adapt.

Bazin said AccorHotels has three pillars. The first its core competency: the management or franchise of some 4,000 hotels worldwide. Unlike most hotel companies that are franchise concentrated, AccorHotels manages 70 percent of its hotels and franchises 30 percent.

"Brands are only sexy if you can engage in new a contract with owners," Bazin said, adding that his company opens one hotel every 36 hours. 

The second is within the travel space and branching out into non-traditional areas. Consider its recent acquisition of private rental company Travel Keys. Bazin noted that one or two days as a solo traveler or a couple have no issues staying at one of his hotels. It's the longer stays, "For that five-day trip with kids," he said, that convinced him of his need to play in the rental space. 

"It's going to be cheaper, more spacious," he said. "One to two days they stay at Accor. What are you going to do—close your eyes? You can't lose your client—be with him wherever he goes, or he'll go somewhere else. 

Community has become AccorHotels' third pillar. The company recently launched Accor Local, a pilot program at 10 Paris hotels, that is about services for locals who don't necessarily stay at neighborhood hotels, but would like to lean on the services a hotel can provide, like dry-cleaning pickup, mail, F&B etc. It's about how to ease quality of life," Bazin said.

Bazin said that pillars two and three would be 15 percent of AccorHotels' core business in the future.

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