AccorHotels in August 2013 tapped Sebastien Bazin as its CEO after the Paris-based hotelier cycled through three other CEOs in two years. Since then, Bazin restructured the company into operations and real-estate divisions and reached a franchising and equity agreement with China-based Huazhu Hotels Group while agreeing to commit more than $200 million to upgrading its digital capabilities. Bazin spoke with hotels editor Danny King at the NYU International Hospitality Industry Investment Conference earlier this month.
Q: While other hoteliers on your NYU panel were optimistic about the industry, you expressed concern. Why?
A: You have a lot of new players -- Kayak, Trivago, TripAdvisor, Booking.com, Airbnb. All of those [companies] didn't exist 10 years ago. The hotel industry has been for too long spectators of that digital mutation. Now, we have to be actors (two days after this interview, AccorHotels said it would almost triple its online distribution to 10,000 hotels by adding independent properties). We can't only watch them provide new services and product; we also have to be innovators. It's absolutely critical to extend the brand beyond the stay. The customer of tomorrow doesn't need only service. They want to be recognized, identified, waited for and thanked. There's an emotional, aspirational aspect that we haven't given enough time to.
Q: When Accor sold Motel 6 in 2012, the company planned to go "asset-light," yet now is focused partially on maximizing profits from its real estate. Why?
A: The financial market had been demanding hotel companies go asset-light, which is what InterContinental and Marriott have been doing. The other way is to prove to the market that you know how to get value out of buying, developing and selling your assets. If you can demonstrate that you can create value by being a good investor, owner and allocator, then the market may permit you to keep both activities. But be transparent, which is why I split the company my first day on the job. Our DNA has been as an investor and developer, so make it a strength instead of a weakness.
Q: Accor also changed its approach toward China by partnering with Huazhu Hotels instead of going it alone. Why?
A: Over the years, [the Chinese] are very good at copying what you're doing, and they do it faster and better. It's true for any industry in China. Huazhu, Jin Jiang, Seven Days, Home Inn -- those four companies did not exist 10 years ago. Now, they are No. 1, 2, 3 and 4 in demand from the Chinese market, and their pace of development is five to 10 times faster than any international chain, which means they're stealing away a lot of good executives, and they're putting a lot of pressure on pricing. You can't compete with them. You just have to take a cold shower; understand that they own the domestic market. So we decided to team up with them.
Q: Your North America presence is very small, relative to the other big hoteliers. What are your plans for the U.S.?
A: Two months ago, we decided that Christophe Alaux, CEO of French operations, would shift to CEO of North America. So he's leaving 2,000 hotels behind to join eight. That's not by accident. America's the largest hotel market in the world, so Accor needs to be more visible. How will Accor do it? I'll wait for Christophe to come back to me within the next nine to 18 months, but it's a commitment. We can do it smartly with the new digital economy players, with existing hotel operators and joint-venturing in some form.