The big interview: Philip Lassman, vice president, head of development, Northern Europe, Accor

by | 09 Nov 2022 | Interview, People

Imagery © Matt Writtle.

Accor’s Northern European pipeline is progressing at a rapid pace, so TOPHOTELNEWS delved into the reasons why with the group’s regional senior executive.

Philip Lassman, vice president, head of development, Northern Europe for Accor, revealed that the area’s upcoming projects number 250 hotels comprising some 40,000 rooms.

Huge territory

The hotel group incorporates a broad swathe of territories into its Northern European classification, right from Ireland at the western edge to central Asia in the east, and from the Nordics down to the Balkans.

The area is further subdivided into four hubs, with Lassman covering the UK, Ireland, Benelux and the Nordic countries, while the other three encompass the DACH countries, Eastern Europe and the CIS (Commonwealth of Independent States) nations.

Popular places

As to where Accor is placing its upcoming hotel projects, Lassman detailed: “Our pipeline is growing at record levels and it’s pretty evenly spread. There may be a bit more weighting to the more mature markets of my area, but there is really an emergence of Eastern Europe and new developments coming in places like Serbia and Albania.

“There are lots of new Eastern European destinations opening up to tourism thanks to regional airlines and low cost carriers., and there’s a growing traveller base from within those destinations as well. We’ve got some great new resorts along the Adriatic coast, predominantly for our premium brands, which is also something that Accor wanted to increase its focus on. My colleagues are doing great things in the Eastern European market.”

However, he underlined: “The mature markets of UK and Germany continue to be where most of the deals are done, but on a percentage growth basis we’ve got fewer hotels in big countries like Hungary and Romania so there will be big increases because they are a blank canvas. We are pretty close to getting to 20 hotels in Romania, whereas we had two or three a few years ago. ”

Investor attraction

According to Lassman, the fundamentals underpinning this development surge are: “We’ve had a very strong few years and that’s attracting new investments into those up and coming markets. Investors from outside the region are going into those locations because opportunities in more traditional markets are more scarce. There’s a lot more capital being raised and so there’s a lot of increased competition on the investor side.

“It’s great to see international brands like Accor coming in and helping these new destinations develop by putting flags in the ground. The strength of Accor as a manager really prevails there because we’ve got the huge resource and infrastructure on their doorstep as opposed to just being a franchise company.”

Asset shortage

He added: “There’s no shortage of investors wanting to come into the hotels because it’s an attractive proposition, it’s a cash flow and asset appreciation business. It’s operational real estate with higher yields. Because Europe’s so diverse you can have a very mixed portfolio mitigating your risk. What we see is actually a shortage of opportunities for those investors to invest in.

“From the UK market perspective we’ve seen a government that’s been very supportive of the industry during the pandemic. Because of that, we didn’t see huge amounts of distressed assets where all these investors thought there were going to be. We’ve seen quite a few off-market deals where the agents are going to a selected few people very quietly, but there are no steals to be had.”

Positive projects

Drilling down into Accor’s own brands, Lassman outlined that there’s not a specific stand out focus: “Generally we’re growing across all sectors in Europe, with Raffles The Old War Office Whitehall coming to London, which we’re very excited about, and new Eastern Europe Novotels.” These include Novotel Tirana in the Albanian capital and Novotel Oradea Aquapark in north west Romania.

He added: “Mövenpick is flying in Eastern Europe and we’ve signed a great project in Spa, Belgium. It’s going to be a conversion of a historic building and will be opening in the next couple of years,”

The UK way

Furthermore, Lassman cited more UK projects making waves: “We’ve just opened this fantastic new Novotel in Liverpool, which also has a number of extended stay rooms within the hotel. It makes sense because you’ll have some guests who stay one night and some who stay one month. It’s about allowing the flexibility to adapt to the requirements of the market. There’s no point having a brand that shoehorns you into a box which doesn’t allow you to capture the business that’s in your area.”

For London, he mentioned Hyde Paradox Hotel London City. The property will occupy 15 Old Bailey, a building originally known as Spiers & Pond Hotel. “This was the first hotel in London when the UK first had electricity,” he explained. “It opened in 1874 and was then turned into offices in the early 1900s but we’re turning it back into a hotel again. It will be opening halfway through next year.”

Also within the country’s capital, he revealed: “There are always going to be new hotspots for development, and new parts of London are being opened up thanks to new rail connections.” This has seen an Ibis Styles open in Romford, east London, earlier this year, joining a site from the same brand in nearby Seven Kings last year. “The new transportation is opening up new communities and it’s also giving people much more affordable accommodation types than having to stay in the City of London itself. The hotels are within a short distance from each other, but are very different and getting some great feedback,” he added.

Fresh concept

Outlining that Ibis Styles and Ibis properties have recently relaunched the brands’ bedroom concept, Lassman explained: “We’re seeing the new Plaza concept coming through now in our new European openings. We had a global tender for the redesign and three concepts were signed up from around the world: Plaza from South America, Agora from Europe and Square from Asia, but those concepts weren’t limited to where they were designed.

“The Plaza concept was the one that owners liked most. It’s just clean and tidy, with lots of straight lines and a nice wood floor effect. It’s gone down very well and it’s really giving the brand a new lease of life.”

Influential factors

In terms of development direction and how macroeconomic factors are influencing decisions, Lassman responded: “We adapt regionally where we need to, as we have done recently when it comes to ceasing developments in Russia.

“But actually the fundamentals are who’s the partner that we’re going to work with? Are they a good match for us and are we a good match for them? Because the last thing we want to do is get into partnership with somebody and it doesn’t work out. Obviously the place is very important. Can we add value? Do we have the right brands for the place?”

He further reported that ESG (environmental, social, and corporate governance) is hot on Accor’s agenda. “We ask ourselves whether we are making a valuable contribution to the society that we are going into. We cancelled a couple of projects where there was a negative impact on ecology in some of these unspoilt beach resorts. We took the decision to pull out because actually it was going to ruin the environment. We want to be a pioneer in the ESG field.”

Key segments

On the subject of key segments, Lassman detailed: “We’ve got a strong push on the luxury and the lifestyle sector at the moment, which is great because we’ve gone big into partnerships like Ennismore. Plus the premium segment was something we traditionally struggled on, but now we’re excelling in it.

“We are very strong in extended stay too. If guests are big fans of one of our brands like Novotel, if they’re staying a long time, they can now stay at a Novotel Living. The first European property’s going to be Novotel Living Tallinn in Estonia. We also have Mövenpick Living and Pullman Living, in addition to Adagio Aparthotel, which is the most well represented extended stay brand in Europe. We’ve created these extended stay labels for the majority of our brands to give investors that more choice.”

Brand choice

Investigating what these options mean for Accor’s hotel development, Lassman noted: “Being an asset light company, what is really important for us is giving our partners choice, flexibility and diversity for the brands and segments that we have. If you’re going to go big on asset light growth, then you do need diversity. You need to give a suite of options to investors.

“I get a lot of people saying, ‘Accor’s got too many brands’. I never heard anyone say Kellogg’s or Unilever had too many brands. We don’t have too many brands because while investors want a choice, they’re not choosing between one of 40 brands. When you are looking to develop a hotel, you appreciate a choice of two, three or four brands that are relevant to what your vision is for your project.”

The road ahead

Asked about Accor’s future, Lassman concluded: “My focus is on asset light organic growth. In the last few years we have been the number one company in terms of signing and opening hotels.

“If we continue the trajectory we’re on, we’re going to grow a lot more in Eastern Europe. We like to scale markets but we have also spent the last year seeding the emerging markets, because they will be the next mature markets. We’re a high energy-charged team opening lots of great hotels.”

Many TOPHOTELNEWS articles draw on exclusive information from the TOPHOTELPROJECTS construction database. This subscription-based product includes details of thousands of hotel projects around the world, along with the key decision-makers behind them. Please note, our data may differ from records held by other organisations. Generally, the database focuses on four- and five-star schemes of significant scale; tracks projects in either the vision, pre-planning, planning, under-construction, pre-opening or newly opened phase; and covers newbuilds, extensions, refurbishments and conversions.

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