Over dinner, AccorHotels’ CEO Sébastien Bazin discussed disruption; trial, error and success; shoe-menders; new-brand scale; provision of local services and not really knowing his fellow hotel company leaders.
Last Wednesday I had the pleasure of meeting AccorHotels CEO Sébastien Bazin at the Sofitel London St James following the company’s 2017 earnings presentation.
Here are some of the highlights of Bazin’s candid conversation with the press following a record year for the French hotel company.
Independent hotel initiative
Bazin admits to mistakes, but also has a tendency to want to continue to test, experiment and be as much of a disruptor as he can within the parameters of running a huge hotel company.
The June 2015 initiative to add independent hotels to AccorHotels’ own booking platform was one of those misses. Bazin said company executives were in a rush to add hotels to the plan and did not think hard enough about where those hotels should be. Bazin added he realized too late that the hotels were not in locations where guests wanted to be.
Bazin said he awaits the next phase of disruption. Online travel agencies led to digital, which led to mobile and now has led to artificial intelligence, and the next one might be here in six months, he said.
Hotel companies had to be ready because firms such as Airbnb were always reinventing themselves, he added.
Bazin professed high admiration for Airbnb, but he said recent speculation that it might soon go public could make its executives anxious to find new revenue streams in response to many municipalities starting to put into law restrictions on the number of days hosts can rent out spaces.
And as we know, investors generally do not like uncertainty.
Bazin also said he’s certain that in China, in the not too distant future, there would be no cash transactions performed anywhere.
I would suggest without professing this to be rocket science that if that were to happen that would likely have a ripple down effect to the rest of the world.
Bazin said he was happy leading AccorHotels, whose scale makes it the largest hotel company in most parts of the world but not in China or the United States.
He wondered aloud if some new brands would get the scale predicted by their executives at launch, such as Hilton’s Tru and Marriott International’s Moxy, but he didn’t criticize either brand.
Bazin also said he has met the CEOs of the world’s other large hotel companies but does not interact with them very often. With that in mind, I can say here with some certainty there is no secret Opus Dei or Bilderberg Club of hotel CEOs leaning over a huge globe dividing up the world. No, there’s competition for guests, plain and simple.
Bazin’s latest hunch was to enable his hoteliers to launch local services for the one billion people who now live in cities and might never need a hotel room in the city they reside in.
The idea came from an anecdote, he said. A distant friend called him to say that he had a father who had come to the city for medical treatment, but that the friend suddenly needed to attend a mandatory meeting.
His dilemma was that he could not leave his father, who would be there for several more hours before his train home. Could Bazin do something?
After some thought and a phone call, Bazin offered to help. The AccorHotels property close to where the friend lived would look after the father, put him in a comfy chair with a TV and refreshment, have someone at the hotel keep an eye on him, accompany the father to the train station and send a text to the son when the father was safely aboard.
This made Bazin wonder what services could be provided and monetized, and how well his hoteliers truly knew their neighborhoods. What was the name of the local butcher or shoe-mender?* Did his hoteliers know, and if not, why not? Had they invited these community members to the hotel for a glass of wine? If not, they should do so.
I very much like the idea for our world of hotels being the centers of their communities, not exclusive strongholds, although the church-versus-public house controversy as to which one of them is the center of British life is one that has raged for hundreds of years.
During the full-year results, Bazin fired back at analysts who scorned some of AccorHotels’ initiatives, most notably the purchase of FRHI Holdings first announced in December 2015.
“What did we hear from each of you (analysts)? … ‘It’s crazy; you’ve gone off the rails; it’s private equity; what’s this business of buying at the worst time brands at 20 times the multiple? You don’t know what you’re doing. Accor’s not credible in luxury. … You will lose 30% of your management contracts; your hotel managers will leave in droves; and you’ve probably negotiated poorly with our owner friends of the day. … You shouldn’t give stock.’”
I asked Bazin about this. Firstly, he was pleasantly surprised I had listened to the presentation, which I replied sort of constitutes the very idea of my role as a reporter covering the hotel industry.
“I did not prepare that, but sometimes the amount of negativity is very aggressive,” Bazin said. “I just wanted them to see that we came through on our promises and that their comments have no validity.”
*During the conversation about local services, butchers and shoe-menders, Bazin asked what the correct noun was for those who fixed shoes and boots. “Cobblers” I said, which also happens to be English slang for statements that are deemed to be rubbish or lacking in truth or substance. The French attendees at dinner I think were delighted and amused by this “mot anglais” and repeated it again in the hope of remembering it. Expect it to be used when analysts give Bazin some grief in the future.
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