Driving procurement transformation at AccorHotels
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Procurement transformation through a commitment to local sourcing WRIT TEN BY
OLIVIA MINNOCK PRODUCED BY
ARRON R A MPLING
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SEBASTIEN BRUNEL, SENIOR VICE PRESIDENT OF PROCUREMENT AT ACCORHOTELS, DISCUSSES THE TRAVEL & LIFESTYLE GROUP’S PROCUREMENT JOURNEY IN DRIVING GROWTH AND DELIVERING A UNIQUE GUEST EXPERIENCE WITH LOCALLY SOURCED PRODUCE
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ith 4,600 hotels around the globe operating across 100 countries, AccorHotels is one of just a handful of hotel operators
in the world with more than 500,000 rooms to its name. As a market leader in many regions around the world, AccorHotels is now making strides 04
across North America as well – with the continent representing significant opportunities for growth and revenue. Investment in the region is revving up with acquisitions including the purchase of the Fairmont, Raffles and Swissôtel brands; an 85% stake in US-based 21c Museum Hotels, an awardwinning hospitality management company which combines a multi-venue contemporary art museum and boutique hotels; and a 50% stake in independent luxury lifestyle operator sbe Entertainment Group. Boasting over two decades of industry experience, Senior Vice President of Procurement Sebastien Brunel is keenly aware of how the hotel industry has changed during this time, and how the evolving needs of consumers have particularly impacted procurement. “Lifestyle is something which is very new to the hospitality business,” he outlines.
“Procurement is greatly positioned in the organization and part of the leadership committee, making our function a key component for North and Central America” — Sebastien Brunel, Senior Vice President of AccorHotels
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“People, especially the younger generation, are looking for different experiences. They don’t want the traditional hotel experience or a standardized room – they want to have fun, new experiences and make connections.” While AccorHotels currently has fewer than 100 hotels in North America, the region still reflects a notable proportion of its business and is home to some of the company’s largest properties, which average around 500 rooms and several restaurants apiece, meaning total spend is significant for 06
“Today, we’re coming back from global sourcing to more national or even local sourcing. We have a strong desire to buy local, and work with local producers” — Sebastien Brunel, Senior Vice President of AccorHotels
Brunel and his team. Iconic hotels with global notoriety which are present in the region include the original Fairmont, Fairmont San Francisco; The Plaza, A Fairmont Managed Hotel, in New York City; Fairmont Le Chateau Frontenac in Quebec City; and Fairmont Banff Springs, amongst others. AccorHotels initiated investments in the procurement function 25 years ago when volume in key regions started to be significant. Today, the company’s procurement function is organized
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regionally and globally, with over 20
making our function a key component
procurement organizations and more
for North and Central America,�
than 180 people around the world. The
Brunel explains.
entire function reports to Paris-based
In terms of the evolution of procure-
global Chief Procurement Officer (CPO),
ment at AccorHotels, the way services
Caroline Tissot, while all procurement
are offered has evolved thanks to
leaders in the regions have dotted lines
consumer feedback. The dynamic
to regional executives.
of buying and category management
In North America, procurement
is impacted by market trends and
also reports to Chief Operating Officer
traditional in-house services are
(COO), Kevin Frid. “Procurement is
increasingly handled by external
greatly positioned in the organization
providers. Laundry is a good example
and part of the leadership committee,
of a category historically managed w w w.a c c o rho te ls . com
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a high-level overview and at a line item detailed level. Similarly, BirchStreet’s Recipe Pad is a great mobile tool for chefs and kitchen staff that uses a simple picture-based interface; allowing chefs to browse, search, view and scale published corporate or property-level recipes through an organization’s private online recipe library. The process of automating functions in procurement, finance, operations and food and beverage contribute to a company’s overall success and bottom line. AccuBar, an acquired company by BirchStreet in 2016 is a leading component of the BirchStreet inventory control solution that offers a cloud-based beverage inventory management to maximize beverage profits while being seamlessly connected to BirchStreet’s procureto-pay automation solution. Customers report an average of 10 to 20 percent beverage cost reduction with additional cost savings from efficiency, automation and accountability. It eliminates the guesswork for reordering with par values and alerts, and provides easy scalability for large banquets and events. AccuBar’s bar code scanner will help one person do the work of two in less time, which will drastically lower labor costs. Often, customers aren’t able to detect theft, but with AccuBar’s loss prevention functionality one can quickly hold the staff accountable for loss. Finally, instant profit reporting and business intelligence will benefit any company immediately. Established in 2002, BirchStreet Systems is a privately held company and headquartered in Newport Beach, California, with offices in Denver, Mexico City, China, Singapore, India and Europe. For more information, events and webinars, or to request a personal demo, please email sales@birchstreet.net or visit www.birchstreetsystems.com.
CLICK TO WATCH : CPO SEBASTIEN BRUNEL TALKS GLOBAL AND LOCAL SUPPLIES IN ACCOR’S SUPPLY CHAIN 10 in house but moving more toward exter-
the teams in the hotel with different
nal providers. “We have a big evolution
needs and expectations between the
in the way hotels are spending their
managers, chefs, executive house-
money,” he concludes.
keepers – but also the owners of the
In addition, since AccorHotels now
hotels, because it is in their best inter-
manages and franchises its hotels
est to maximize their benefits through
instead of owning the premises
a strong procurement organization.”
outright, the procurement function
As a management company, procure-
has to adapt. “We came from an asset
ment within AccorHotels is very much
heavy model to an asset light model
a service offered to its owners and
– in the past, we owned our hotels
franchisees. “We have become a
but now we have management and
strong intermediate between suppli-
franchise contracts,” says Brunel.
ers and partners, and both owners and
“As procurement professionals,
franchisees are extremely organized,
we therefore have two customers:
business driven and cost driven,” Brunel
explains. “Unless we demonstrate
started to manage non-food opera-
savings and value creation, they will not
tions in the early 2000s,” says Brunel.
use our services. We have to monitor
He adds that suppliers and other
the competitiveness of our contracts
organizations had not previously
compared to market prices, and offer
understood hotels as a category to
tracking, distribution, a loyalty program
focus on. “I would say it took between
and procurement program – procure-
five and 10 years to get a strong offer
ment is one of the key departments
of procurement solutions for hotels
to attract new ownership groups and
for food, non-food and beverage.”
franchisees.”
Brunel notes that since then, suppli-
As the business has transformed, its
ers have begun to see opportunities
supply chain has diversified and evolved,
in the ever-growing hospitality sector.
and so too has the role of procurement.
“In terms of some suppliers, a lot of
“20 years ago, 90% of our function was
businesses didn’t have a hospitality
based on food management – then we
division 10 to 15 years ago – they did not
E X E C U T I V E P R OF IL E
Sebastien Brunel Brunel has 25 years of experience in the hospitality business with 20 years in procurement. Originally from France, he has occupied several procurement functions in the global procurement office as well as working in several countries. Brunel’s first international experience was in the UK, before he then occupied a function of Category Manager in Dallas Texas in 2002. In 2007, Brunel moved to South America to be the head of procurement of that region, based out of Sao Paulo. He went back to Paris in 2014 to manage the international team. He has occupied the position of SVP of North and Central America since January 2017 when he relocated to Toronto. Sebastien holds an MBA from the FGV University of Sao Paulo. w w w.a c c o rho te ls . com
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know how to attend to the hospitality
strong role, not so much in finding new
businesses. But now, there are people
procurement solutions but in giving
dedicated to hospitality. We work
better access to our procurement-se-
together on value creation. Competi-
lected products and services for our
tive pricing is an important element,
customers. How can we make the
but having sustainable programs,
process easier to access? How can
product development and innovation
we offer a procurement marketplace
take an important share of the day-to-
to make sure people can go to an
day of a procurement specialist – both
online catalogue?”
on the team but also at the supplier.”
Over 10 years ago, Fairmont selected
Of course, process and digitization
Birchstreet which provides procure-to-
have been key to AccorHotels’ procure-
pay solutions with the aim of improving
ment journey. “Digital is playing a very
business processes through efficiency w w w.a c c o rho te ls . com
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and cost reduction. “Birchstreet brings structure to our process. We have PO approval process, PO management, inventory management, product management and interaction between hotels and suppliers. This is essential for AccorHotels, especially in North America.” The businesses have worked together for many years, and AccorHotels favors the platform as it works well especially for its larger properties. “They’ve been able to invest in internal workflow – hotels with over 1,500 employees need a procurement process and workflow to ensure consistency.” Birchstreet has developed this from a back-office perspective, and the solution is effective
“Guests don’t want the traditional hotel experience or a standardized room – they want to have fun, new experiences and make connections” — Sebastien Brunel, Senior Vice President of AccorHotels
for AccorHotels’ finance department. Brunel adds that, as the partnership
The vast array of products AccorHotels
continues, he hopes to develop a system
buys, and indeed the array of suppliers
with even more benefits for front-end
it works with, presents challenges for
buyers, which he is confident can be
eprocurement. “Eprocurement works
achieved. “So far we have partnered
very well with products but it’s not as
with Birchstreet for 10 years; they’ve
simple for utility developments, such
always supported us in everything
as service companies – you can easily
we’ve done and the platform brings
buy a kilo of coffee, but one kilowatt of
efficiency, good savings and automatic
energy isn’t the same, so it’s not ideal
updates to inventory – we probably
for non-tangible contracts.”
do around US$150mn of annual spend through the Birchstreet platform.”
In addition, prioritizing the luxury experience over recent years, Acw w w.a c c o rho te ls . com
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1967 Year founded 10,000+ Approximate number
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of employees
corHotels has developed a strong
“Today, we’re coming back from global
commitment to local sourcing and
sourcing to more national or even local
as such, its supplier mix has changed.
sourcing. We have a strong desire to buy
“Our supplier base is very diverse due
local, and work with local producers
to the products we buy – we go from big
– such as sourcing fish from the coast
global companies like LG or Samsung,
of Canada, rather than importing it from
to large national companies, to smaller
Scotland or elsewhere. This is the way,
regional suppliers of fruits and vegeta-
especially in the luxury hospitality
bles or fish, with five employees,”
business, to provide local experiences.”
explains Brunel. “In North America,
Twenty years ago, AccorHotels had a
I would say 30% of our spend consists
larger range of suppliers, which through
of global providers, 40% national and
globalization was reduced – now, it is
30% regional.”
increasing again due to the Group’s
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local sourcing commitment. “We went
a cookie-cutter outcome, especially for
from a vision of needing to reduce the
the luxury businesses which account
supplier base, to a vision that we still
for an important part of AccorHotels’
need a concentrated supplier base
global operations, and are particularly
but with a lot of choice.” As a result,
prevalent in North America. “We invest
a limited number of global providers
a lot in the lifestyle element and the
consolidate more spend but there is
uniqueness of our brands, we need more
a strong need to develop diversified
products and more solutions – we don’t
local solutions and reduce logistics.
want the same headboards, lighting and
Catering for the unique demands
food all over the world and we’re not ac-
of various owners and franchisees,
quiring new companies to change them
especially since the Group’s latest
into a standardized hotel.”
brand acquisitions, is vital in avoiding
Brunel explains each of the company’s w w w.a c c o rho te ls . com
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CLICK TO WATCH : CPO SEBASTIEN BRUNEL TALKS DRIVING PROCUREMENT IN ACCORHOTELS 19 4,600 hotels across the world is treated
Despite the challenges and varia-
as a unique point of production. “It’s
tions facing the procurement function
not like the manufacturing industry
at AccorHotels, this essential element
where everything can be produced
of the business is key to the significant
and distributed from a single location.
growth Brunel looks forward to. He
Hospitality business and decentraliza-
cites the company’s latest acquisitions
tion of ordering points makes our supply
and the new openings it has celebrat-
chain very complex and diverse in
ed as a result: the 1,048-room Fairmont
terms of suppliers and products. We buy
Austin which debuted earlier this year
food, beverages, technology, intellectual
as the brand’s largest hotel in the US,
services, financial services… the quantity,
as well as the planned openings of
too, is diverse, as a small hotel might
Fairmont Century Plaza, Los Angeles;
cumulate an annual spend of $400,000
Sofitel Mexico Reforma in Mexico City
while a large hotel can spend more
and SO/ Paseo del Prado in Havana, all
than $20mn.”
in 2019. AccorHotels will also open the w w w.a c c o rho te ls . com
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first Raffles Hotel & Residences in North America in Boston as well as Fairmont Costa Canuva in Mexico’s Riviera Nayarit and Fairmont Saint Lucia in the coming years. AccorHotels is therefore particularly committed to North America as a region of growth, where it works with over 20,000 suppliers and spends $600mn each year, from small fruit and vegetable suppliers with orders of less than $500 to larger companies receiving millions in investment. On its North American journey, Brunel says the company is keen to partner with suppliers desiring to grow outside of
“Our supplier base is very diverse due to the products we buy – we go from big global companies like LG or Samsung, and large national companies, to smaller regional suppliers of fruits and vegetables or fish, with five employees” — Sebastien Brunel, Senior Vice President of AccorHotels
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North America, such as audio-visual
customers and increase our ability to
provider PSAV. “It’s a great example:
offer more contracted solutions.
the legacy contract is coming from
Another challenge is to maintain a
North America and can be extended
good level of compliance at a national
to other places in the world.”
level, while remaining competitive
However, as AccorHotels grows in
against regional offers. The third
size and spend in North America, the
challenge is to find a way to leverage
value offer of procurement will need to
volume while also keeping the
be even further solidified, says Brunel.
uniqueness of the product. And the
“We have to work hard to show the
fourth challenge, of course, is people
importance of procurement with our
– the development and training of our
“From a customer perspective and supplier perspective, having a strong procurement organization in North America is key” — Sebastien Brunel, Senior Vice President of AccorHotels
procurement talent. In the UK, they
hospitality player without having
have CIPS (Chartered Institute of
business activities in this region. From
Procurement and Supply) qualifica-
a customer perspective and supplier
tions, but I haven’t seen many global
perspective, having a strong procure-
equivalents so we must find trained
ment organization in North America is
procurement professionals with a
key,” he concludes.
balanced commercial background.” “We want to play a major role in North America as well as globally,” says Brunel. “We’ve started to reinvest here as we cannot be a true global w w w.a c c o rho te ls . com
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Accor Hotels Group (Global office) 82 rue Henri Farman, Issy les Moulineaux, 92130, France T +31 20 240 1680 www.accorhotels.com