Accorhotels Essential Business Magazine Feature 2016

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AccorHotels w w w . a c c o r h o t e l s - g r o u p . c o m

Service At Africa’s

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Hospitality

In this profile of AccorHotels interview Phillippe Baretaud, AccorHotels’ Senior Vice President for Development Africa & Indian Ocean, about the challenges of expanding into existing and untapped African hotel markets.

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A c c o r H o t e l s

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ccorHotels (formerly Accor S.A), are a French multinational hotel group operating 3,700 hotels across 21 brands worldwide in more than 94 countries. The group has been operating in Africa for more than 40 years and is, in terms of number of rooms, the leading hotel operator on the continent.

When it comes to development AccorHotels’ strategy is to secure economic growth by diversifying into economies with large service industries.

As Baretaud explains, “service oriented economies represent (for the hospitality industry) the main leader of activity and potential opportunity. That’s because the service economies generate more international and internal business travellers.

They also generate business across the economic segments including domestic, midscale, mid-income and young entrepreneurs, the young commercial domestic market, and the regional

market. At present in many African countries, serviceoriented economies are still not representing their potential.”

AccorHotels recently signed and approved a contract with the Angolan authorities to open 50 new hotels in the country, split between their budget and luxury segments. Baretaud details the company’s strategy for its new operations in the country:

“AccorHotels recently signed and approved a contract with the Angolan authorities to open 50 new hotels in the country, split between their budget and luxury segments

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A c c o r H o t e l s

“22 of them are going to be mid-scale bearing the Mercure and Grand Mercure brands, 27 of them are aimed at the budget segment of the market, (bear in mind that the budget segment doesn’t mean limited services) under the ibis Styles network, which is a version of the popular ibis brand that focuses more on a local identity rather than standardisation, and only the one remaining hotel will be under the Sofitel luxury brand.

We’re also positioning these hotels across the country, not just in Luanda, aiming to supply mid-income travellers, both international and domestic.”

Part of the attraction of Angola for AccorHotels is that its natural beauty means tourism, given the right conditions, can flourish.

“Hopefully the government will preserve the various beautiful spots to keep attracting tourism,” says Baretaud.

“The hospitality education plans are part of AccorHotels’ efforts to boost the service economy in countries they operate in, providing training to 3,000 Angolan staff who will eventually be qualified to manage the group’s hotels in the country A continent of growth

Baretaud is optimistic about Africa’s potential, calling it “a continent of growth”. He cautions, however, that the African market is a huge and diverse one, and there are hurdles yet to cross in many places: “Within Africa you have many different countries at different levels of development. Over the last two years we have seen that unfortunately many of the economies that are supposed to drive the growth of the continent are still too oriented around commodities.

As we see in Nigeria and Angola, among others, when there’s a slowdown in the oil market the economy slows and infrastructure

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stops being built. This slows the development of the hospitality industry in the country. That is, I would say, the main challenge we’re facing in Africa.”

Baretaud credits AccorHotels’ international pool of staff as a major factor in their success worldwide, as well as their policy of working with local partners.

This was a huge advantage in securing the Angola contract.

“We’re working with an Angolan partner, AAA Activos Lda, on a hospitality education plan.

That’s the main pillar of our deal in Angola, and it’s possible because we have this unique international presence. We had an advantage in that we have

Hospitality

The golden rule

Beyond that, there is also the rule explaining the sometimes gradual progress of AccorHotels’ brands into new markets. Baretaud says that AccorHotels have one rule guiding how they work: “Be able to deliver the support. It’s not enough to put one hotel into a country under one brand name of Accor if there isn’t enough support in that country from marketing, management and infrastructure.

experienced managers and staff who speak Portuguese from our venues in Brazil and Portugal, such as the new general manager of operations for Angola, and as such we were able to prep the venues with a team of our own people.”

The hospitality education plans are part of AccorHotels’ efforts to boost the service economy in countries they operate in, providing training to 3,000 Angolan staff who will eventually be qualified to manage the group’s hotels in the country.

This plan is only possible thanks to extensive work with local government departments and Accor’s access to fluent Portuguese speakers.

Support comes with proximity.

We don’t open just for the sake of signing a deal or for the revenue, we need to make sure we don’t spread out and overstretch ourselves. This is particularly important in Africa. It’s huge, and it isn’t always easy to travel. We approach our developments by perimeters of density, what I call operational perimeters. That involves establishing effective operational zones where we can build up density of hotels and make sure we have a network of support departments in an area.”

What next?

At present, AccorHotels is concentrating on key cities in Africa to establish a foothold for their larger expansion inland. In East Africa it already has Nairobi and Addis Ababa as main circles of operational presence. Once properties are established there it will be able to think about other capitals and neighbouring countries like Rwanda, Uganda

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and Tanzania, building up a high-density presence that won’t overstretch itself.

Once AccorHotels is ready to establish this high-density presence, it will then analyse the local markets to look for opportunities. “There’s the MICE market (that’s Meeting Incentive Convention Events) and that’s under development in Africa, especially in the case of the Pullman brand, an international upscale brand that’s in a good position in the meeting, conferencing, banqueting and events markets.”

The other market AccorHotels is currently developing is the budget segment. The most mature market on the continent is South Africa, a segmented economy with a lot of expert management companies, national management companies, branded properties and chains. This brings an opportunity for AccorHotels’ brand such as ibis, with the budget segment not yet properly addressed.

Baretaud raises a current issue, that of the potential for oversupplying South Africa’s more affluent markets. “South Africa is one of many areas where adding more luxury hotels risks over-supply. This gives us an opportunity to show our versatility both as an international company and as a company with a diverse selection of brands addressing all segments of the market, from budget to luxury.”

@AccorHotelsNews @accorhotelsgroup

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