Javier López
Vice President of North America Operations
AccorHotels
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View from the Top

Diversification Key Strategy for Rapidly Evolving Market

Wed, 05/08/2019 - 16:23

Q: What differentiating value does AccorHotels offer through its hotel brands?

A: AccorHotels is a multinational company that manages three segments: luxury, midscale and economy. We also have a range of complementary companies and products for the hotel sector, which means that we own companies in different business lines, such as food and beverage, catering and concierge services. In the past, the group owned the buildings where our hotels were installed but as part of a new growth strategy, we decided to sell around 60 percent of the buildings, which generated a significant cash flow that has allowed us to acquire major hotel chains such as the Fairmont brand. More recently, we acquired groups in South and Central America, South Africa, Australia and Switzerland. We are multidisciplinary and we play in different segments with complementary businesses. 
In Mexico, we have 23 hotels and most operate under the Ibis brand, although we also have two Novotel properties and a Fairmont in Mayakoba, Quintana Roo. This is our inventory so far but we have a significant portfolio of hotels under construction. In 2019, Sofitel Mexico City Reforma will open, which will be an iconic hotel for us. 
Q: In which hotel segments do you see the best possibilities for the positioning AccorHotels’ portfolio?

A: We see a great opportunity for growth in the economical segment since we only compete against two or three players. In many US cities, around 70 percent of the hotel companies are independent and only 30 percent of the inventory corresponds to branded hotels. In the future, independent hotels will suffer since in evolving economies people prefer brands and recognized products. We believe that many independent hotels can start to migrate toward established brands. That is why we expect to continue developing the Ibis branch through franchises. We also believe that the market is open for the rest of our luxury brands as cities like Los Cabos, Puerto Vallarta and Cancun offer space for our brands. 
Q: How successful has SECTUR been regarding the industry’s development and where should it further collaborate with the private sector?

A: Part of the great success Mexico has experienced is a result of the appropriate development of public policies. Marketing campaigns extolling Mexico as a tourist destination are very well-focused. We could work more closely with SECTUR in the area of staff training for hotels. There are many regions in the country that lack that resources to properly train personnel. SECTUR could play a more active role in this regard. 

Q: What other factors must be addressed to successfully develop the tourism sector?

A: Compared to other countries in Latin America, Mexico has a good tourism infrastructure but it must continue to develop this sector. For instance, Mazatlan is a beautiful destination but reaching the city is very difficult due to the lack of connectivity, which also happens in Sonora. It is not only necessary to improve airports but also highways. An interesting example is the construction of the highway between Durango and Mazatlan, which has completely changed the city, increasing the influx of people visiting from the center of the country. This is the type of infrastructure that needs significant government investment. 

Q: What untapped possibilities is AccorHotels eyeing in Mexico?

A: AccorHotels is a leader everywhere but in North America. It has been a difficult market for us, including Mexico. Given that we are not among the strongest players, the development of new brands has always been difficult. Since the group has access to cash flow, we will start making regional acquisitions of well-known strategic brands in the luxury sector. Today, 50 percent of our hotels are economy, 25 percent are in the middle sector and only 25 percent fall into the luxury and upscale segments.