Select Page

Mission de-standardise: Strategic changes at Accor liven up legacy brands, spur growth [Construction Report]

by | Jul 8, 2019 | Chains

Design touch-ups make Accor’s legacy brands attractive new hotspots

An in-depth look into how Accor shifted focus from standardisation to creating unique properties which is dazzling guests and boosting the group’s revenue

After making headlines last year for selling off AccorInvest, Europe’s largest hotel company is focusing on de-standardising its offering.

So far that seems to be going well.

Strategy already paying off

Accor’s founders Paul Dubrule and Gérard Pélisson would barely recognise their company today.

In the late 1960s, they started what would become the world’s sixth largest hotel group and were inspired to set and maintain strict standards by successful role models in the United States.

While their approach led Accor to successfully manage nearly 4,800 hotels in 111 countries and generate €20 billion ($22.5 billion) in revenue per year, today the company is moving away from strict standards which were taken to unnecessary extremes in some cases.

Gwenaël Le Houérou, vice president of the AFA (Accor Franchise Association), remembers not being allowed to promote local wines and certain regional produce but having to feature products guests clearly were not interested in due to brand guidelines.

Unsurprisingly, he is happy that this has changed and Accor’s CEO Sebastien Bazin is shifting the focus to creating more personalisation.

Now, franchisees are investing in their properties, renovating them to reflect the latest tech and design trends and to create a more personalised experience for guests.

Things are working out well as the Ibis Budget in Angers shows. After its €935,000 renovation, the average room rate increased by 12% and RevPAR (revenue per available room) rose by 28%. Needless to say, the owner is happy to have made the investment.

While this is just one example, similar results are coming in across the board and overall Accor’s RevPAR rose by 5.6% last year.

“We have been destandardising like crazy and now the results are in. Customer satisfaction has increased by 13 points over the last three years,” rejoices Amir Nahai, CEO Group Food & Beverage at Accor.

“Even if the service is not always at the expected level, Accor has made great progress,” says the director of the firm Protourisme Didier Arino. “Today, the best breakfast in Bangkok is served at the Pullman,” he states.

This new-found growth and improved performance franchisees are experiencing may allow Accor to pass the bitter pill of increasing royalties, the commissions Accor levies each year on their partners’ turnover in exchange for using its brands and services such as distribution and marketing.

According to a confidential study by KPMG, Accor increased has already them from 6.2% to 7.6%, on average, between 2012 and 2016 for Ibis Budget, Ibis Red, Ibis Styles, Mercure and Novotel. Future increases are on the table but have not been announced.

Keeping what works and changing what doesn’t

On closer inspection, some standards have been preserved, especially in the rooms. The comfortable bedding is always the same and cosmetics are identical everywhere.

Personalization comes into play in areas like reception and dining venues. For example, the Mercure de Toulouse offers a club sandwich with duck breast. The Ibis Paris Tour Eiffel features a bar specializing in organic wines and weekly jazz concerts. A Starbucks-style cafe space, as well as 45 parking spaces rented to local residents and nearby SMEs, have also been added. “People who would never have done so before now come to us as clients,” says Abdou Diongue, the property’s deputy director of the new guests his hotel now attracts.

Since destandardising, amenities can vary greatly depending on the city and the brand a guest has chosen.

Now one may find winter gardens or roof terraces at the Novotel, coworking spaces at Ibis and Mercure to seduce the independent workers in the area. But even though things are a lot more easy-going now, each project must still get the green light from headquarters.

“After launching three new designs for Ibis in January, we are about to unveil the future Novotel in the next few months,” said Steven Taylor who oversees Accor’s brands.

But what about owners reluctant to face these expensive refreshments? “Our logo and collaboration are not intended for those who do not wish to renew themselves,” says Accor CEO Sebastien Bazin. Consider them warned.

Strategic changes to foster growth

Under the leadership of Sebastien Bazin, a former financier, Accor has gone through many powerful changes. First, it has internationalized to broaden its market share and reduce its dependence on one geographic segment.

“Europe accounted for 76% of our turnover when I arrived in 2013, compared with 52% today,” said the globe-trotting CEO who says he travels 260 days a year, two-thirds of the time at Accor, the other third amid the competition.

Accor then expanded from 13 to 38 brands in just six years. “And soon we will have 50 brands, even if not all of them are meant to go global,” Bazin announced.

Ibis, Novotel, Sofitel, Mercure and others are still the group’s cash cows, from Paris to Beijing, via Nairobi. But they now coexist with the hip German chain 25hours Hotels, Jo & Joe youth hostels, luxurious villas by Robinsons and Raffles’ palace hotels.

This portfolio has been designed to appeal to investors. Since 65% of assets were sold for €4.8 billion at the end of 2018, the business of Accor is 90% based on franchise and management contracts, which generally run for 12 to 15 years.

Making Accor asset-light took over four years, but in the end, the company got an excellent price for its shares of AccorInvest. However, this is not over yet. Accor plans to sell the 35% it still holds in AccorInvest by 2023.

This cash influx allowed Bazin to do some shopping. Recent acquisitions include Mantra in Australia and Mövenpick from Switzerland. Other new names under Accor’s umbrella are Fairmont, Raffles and Swissôtel.

These purchases allow Accor to maintain competitive with the lies of Marriott from the US or the Chinese Jin Jiang. “The independents are suffering so expect a consolidation of the sector in the coming years,” Bazin predicts.

His acquisitions also allowed him to accelerate in the high-end market. “When I arrived, luxury represented only 15% of our business, and again, it was only Sofitel,” says the CEO. “Today, luxury makes up over 40% or our properties.”

Making the best of digital distribution

The only thing that didn’t go so well, was when Bazin decided to take on which brings Accor over 20% or its bookings.

The company’s own platform failed spectacularly and led to Accor having to take a large step back in this domain.

In the aftermath, a compromise was made which brought Accor back to the OTA but reduced commission to 7-12% rather than the industry standard of 17-25%.

However, the last word has not been spoken. To get a permanent grip on his guests, Bazin relies heavily on his loyalty program ALL or Accor Live Limitless which will offer members access to experience like concerts, soccer games and more.

Let’s take a look at a few ongoing hotel projects currently in Accor’s pipeline:

Raffles Boston Back Bay Hotel & Residences

Sofitel Resort & Spa Limassol

Pullman Quang Binh



You would like to know more about the upcoming hotel projects by Accor? Download our latest construction report with a detailed overview of the current project pipeline

TOPHOTELPROJECTS uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For more information, check out our Privacy Policy.


Accor is a world-leading augmented hospitality group offering unique and meaningful experiences in almost 4,800 hotels, resorts, and residences across 100 countries. .


[tweetshareinline tweet=”@Accor CEO Sebastien Bazin is shifting the focus to creating more #personalisation ” username=”tophotelnews”]




With the online database TOPHOTELCONSTUCTION you will have access to +6,000 hotel projects and all relevant decision-maker contacts.


Pin It on Pinterest