AccorHotels: A growing African presence

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AccorHotels was already a big, global player – with over 4,500 hotels and nearly 50 in Africa – before embarking on a busy 2018 that has already seen the group purchase a 50% stake in South Africa’s Mantis Group, announce a couple of new signings in Nigeria, and complete the acquisition of Mövenpick Hotels & Resorts. Here, AccorHotels CEO Sebastien Bazin addresses the group’s African growth.

Q: WHAT’S THE OVERALL ACCORHOTELS VIEW ON AFRICA?

A: Within the next 20 years, 25% of the world’s population will be located on this continent. Hand in hand with this exponential growth is our commitment to increase our network from 8% to over 25%. While AccorHotels is well established in Africa – one of the first international companies to enter the continent over 40 years ago, with a deep involvement in Morocco, Tunisia and Egypt, as well as presence in West Africa – we have faced an imbalanced approach to East and Southern Africa. Since joining AccorHotels five years ago, I have put a lot of energy, talent and expertise in addressing this imbalance. Most recently in July, the announcement of a dedicated investment fund for Sub-Saharan Africa with a targeted reach of $1 billion aimed at sustainable hospitality, amplifies our strategy for the long-term potential of the African market. Also, April saw AccorHotels conclude a strategic partnership with the Mantis Group, and just a few weeks ago we announced the closing of the acquisition of Mövenpick Hotels & Resorts. As a result, AccorHotels has become the largest operator by room numbers in Africa and the Middle East, with a committed network (operational and pipeline) of over 400 hotels, representing almost 100,000 rooms across the region. While we are one of the largest operators in Africa, we have scalability and our focus remains on our local partners combined with local expertise.

Q: WHAT WAS THE THINKING BEHIND THE RECENT PURCHASE OF MÖVENPICK HOTELS & RESORTS?

A: With a global network of 84 properties and over 20,000 rooms, the purchase of Mövenpick Hotels & Resorts was a strategic opportunity to bring significant synergies to two complementary businesses on a number of levels. For one, Mövenpick is a Swiss/ European-rooted brand, which fits well with AccorHotels’ longstanding heritage. We also share a common culture of innovation, sustainability and care for the community. As a leading upscale brand, Mövenpick also fills a gap in AccorHotels’ portfolio of brands.

Q: WAS THE PURCHASED STAKE IN MANTIS GROUP DRIVEN BY THE NEED TO GROW ACCORHOTELS’S AFRICAN FOOTPRINT IN A SHORT SPACE OF TIME?

A: The decision to invest in a 50% stake in the Mantis Group does not follow the typical rationale of increasing our group’s presence significantly in Africa. Our commitment to Mantis was based on a mutual trust and understanding of what our two groups could achieve together – Mantis with their intuitive local expertise and credentials in the wildlife conservation space, and our strength in global distribution and loyalty platforms. This decision not only demonstrates our belief in Mantis, but in South Africa as well, and is another example of our ‘Augmented Hospitality’ approach. We have started moving beyond just a global hospitality company to a more wholesome provider of products and services, and imbedding ourselves in the very fabric of the communities that we operate in. Moreover, their conservation credentials find alignment with AccorHotel’s Planet21 sustainability programme.

Q: WHAT’S YOUR OVERALL VIEW ON THE AFRICAN HOTEL DEVELOPMENT SPACE?

A: While acquisition is one route to growth in Africa, it is not the only option. Another viable option for development and growth in Africa is a combination of HMAs and investing in projects, from both a travel and hospitality perspective. With the recent announcement of the investment fund, we now have the scope to explore different opportunities, something unprecedented in our industry and in Africa. The fund will look at more or less all types of opportunities: greenfield projects, brownfield projects and conversions of existing hotels through acquisitions of either single hotels or even small chains to be rebranded. Our focus is on Sub-Saharan Africa, where AccorHotels is less represented today than in North and West Africa. As a result, the fund structure, with the backing of a significant project and asset manager in the industry, and the ability to raise debt from local and international institutions and banks, is the best structure to address the needs of the region and reach critical mass quickly to take a leadership position.

Q: WHAT’S THE ACCORHOTELS PLAN FOR ANGOLA, NOW THAT THE AAA GROUP 50-HOTEL DEAL HAS FALLEN THROUGH?

A: Within the context of Angola and the cessation of our operations there, this was an unforeseen end to our arrangement. As the details of this relationship are of a proprietary nature, we cannot go into them, but we can restate that we look forward to developing our operations in Angola and providing our management expertise across a range of brands.

Q: IS THERE AN ACCORHOTELS BRAND, YOU FEEL, IS THE BEST FIT FOR THE AFRICAN CONTINENT?

A: Africa has unique complexities and cultural richness, so there is not one brand that fits all. Our strategy has never been based on promoting a single brand, but rather to establish and reinforce our presence in 15 key cities in the region, and cultivating our presence with brands that fit with the destination. Interestingly, we are finding that there is a larger appetite amongst intra-Africa travellers (which accounts for more than 60% of our guests and clients in Africa) for economy and midscale options, given the international standards, service and reliability of these brands.

Q: DO YOU HAVE PLANS TO INTRODUCE OTHER, ‘NEWER’ ACCORHOTELS BRANDS TO THE AFRICAN CONTINENT IN THE NEAR FUTURE?

A: The acquisition of Mövenpick and the recognition and strength enjoyed by the brand has a lot of potential for development in Africa. With 24 hotels in operation in Africa, including Kenya, Ghana, Morocco and Egypt, Mövenpick also boasts a robust pipeline, which we look forward to building. In essence, Mövenpick hits the ‘sweet spot’ in our brand architecture, falling between the midscale Novotel and upper upscale Pullman, and as such we have another opportunity to promote this authentically versatile brand.

Q: WHAT ROLE DOES TECHNOLOGY PLAY IN THE OVERALL ACCORHOTELS OFFERING?

A: Digital disruption represents a great opportunity for our industry. In Africa, we are taking more chances with a ‘test and learn’ phase in response to African travellers’ needs. An example is MyChicAfrica, a digital lifestyle platform that invites guests, travelling nomads and the curious-at-heart to rediscover the continent with a completely new lens. Other examples include our partnership with handy, a tailormade mobile phone technology solution for the hospitality industry, and a mobile payment solution and partnership with Jumia travel, the largest online travel agency in Africa.