Images © Matt Writtle.
Accor's pipeline in Northern Europe is progressing at a rapid pace, so TOPHOTELNEWS investigated the reasons for this with the Group's Senior Regional Executive.
Felipe Lassmann,Vice President, Head of Development, Northern Europe forAccor, revealed that the next projects in the area are 250 hotels with about 40,000 rooms.
The hotel group includes a wide range of areas in its Northern European classification, from Ireland on the western fringes to Central Asia in the east and from the Nordic countries to the Balkans.
The area is divided into four hubs, with Lassman covering the UK, Ireland, Benelux and the Nordic countries, while the other three cover the DACH countries, Eastern Europe and the CIS (Commonwealth of Independent States).
Where Accor will be locating its upcoming hotel projects, Lassman explained: “Our portfolio is growing at record levels and is fairly evenly distributed. The more mature markets in my region may have a bit more weight, but there is really an upswing in Eastern Europe and new developments in countries like Serbia and Albania.
“There are many new Eastern European destinations opening up to tourism thanks to regional airlines and low-cost airlines, and there is also a growing number of travelers within these destinations. We have some fantastic new resorts along the Adriatic coast, mainly for our premium brands, and that's what Accor wanted to focus more on. My colleagues are doing great things in the Eastern European market.”
However, he stressed: “The mature markets of UK and Germany still have the most transactions, but in terms of percentage growth, we have fewer hotels in big countries like Hungary and Romania, so there will be big increases, and they are a blank canvas . We're pretty close to hitting 20 hotels in Romania, while a few years ago we had two or three. ”
attraction for investors
According to Lassman, the fundamentals behind this increase in development are: “We've had some very solid years and that's attracting new investment into these emerging markets. Investors from outside the region are turning to these locations because of fewer opportunities in more traditional markets. Much more capital is being raised and therefore there is much more competition from investors.
“It's great to see international brands like Accor stepping in and helping these new destinations thrive by putting flags on the ground. Accor's strength as a manager really prevails there because we have a great resource and infrastructure on our doorstep and we're not just a franchise."
shortage of wealth
He added: "There's no shortage of investors looking to get into hotels because it's an attractive proposition, it's a cash flow and asset appreciation business. It is a business property with higher returns. Because Europe is so diverse, you can have a very diverse portfolio, which reduces your risk. Indeed, what we are seeing is a lack of investment opportunities for these investors.
“From a UK market perspective, we have seen a government that has been very supportive of the industry throughout the pandemic. So we didn't see large amounts of distressed assets where all these investors thought there would be. We've seen some off-market deals where agents go very discreetly to a select few, but there's no theft."
Discussing Accor's own brands, Lassman emphasized that there is no particular focus: “In general, we are growing in all sectors in EuropeVerlosungen The Old War Office Whitehallcoming to London, which we are very excited about, and new Eastern European Novotels.” These includeNovotel Tiranain the Albanian capital andAquapark Novotel Oradeain northwestern Romania.
He added: “Mövenpick flies in Eastern Europe and we have signed a major project in Spa, Belgium. It will be a conversion of a historic building and will open in the next two years.”
The British way
In addition, Lassman cited other UK projects making waves: “We have just opened this fantastic new Novotel in Liverpool which also has a number of long stay rooms in the hotel. It makes sense because you will have some guests staying one night and others staying a month. It's about allowing flexibility to adapt to market demands. There's no point in having a brand that pigeonholes you into a box that doesn't allow you to capture the business in your area."
For London he mentionedHyde Paradox Hotel City von London. The property will occupy 15 Old Bailey, a building originally known as the Spiers & Pond Hotel. "This was the first hotel in London when Britain first had electricity," he explained. “It opened in 1874 and was later converted into offices in the early 20th century, but we are converting it back into a hotel. It will open in the middle of next year.”
Speaking in the country's capital, he revealed: "There will always be new hotspots for development and new parts of London are opening up thanks to new rail links." An Ibis Styles opened earlier this year in Romford, east London, which opened last year joined a same-brand location in nearby Seven Kings. “New modes of transport are opening up new communities and also giving people much more affordable types of accommodation than staying in the City of London. The hotels are within walking distance of each other, but they are very different and receive very good feedback,” he added.
Noting that Ibis Styles and Ibis Homes have recently re-launched the brand's bedroom concept, Lassman explained, “We are now seeing the new Plaza concept at our new openings in Europe. We had a global bid for the redesign and three concepts were signed from around the world: Plaza from South America, Agora from Europe and Square from Asia, but these concepts were not limited to the place where they were designed.
“The owners liked the plaza concept best. It's just clean and tidy with lots of straight lines and a nice wooden floor effect. It went very well and really gives new life to the brand.”
Referring to the direction of development and the influence of macroeconomic factors on decisions, Lassman replied: “We adjust regionally where necessary, as we did recently when it came to stopping developments in Russia.
"But really, the basics are: Who is the partner that we're going to work with? Do they suit us and we suit them? Because the last thing we want to do is work with someone and it's not working. Obviously the location is very important. Can we add value? Do we have the right brands for the place?”
He also reported that ESG (Environmental, Social and Corporate Governance) is on Accor's agenda. “We question whether we are making a valuable contribution to the society we aim to serve. We have canceled some projects where there were negative ecology impacts in some of these virgin spas. We made the decision to retire because it would actually ruin the environment. We want to be pioneers in ESG.”
Discussing key segments, Lassman said, “We have strong momentum in the luxury and lifestyle sectors right now, which is great because we've grown into large partnerships like Ennismore. Also, the premium segment was something we traditionally struggled with, but now we excel at it.
“We are also very strong when it comes to long-term stays. If guests are big fans of one of our brands like Novotel and are staying for a longer period of time, they can now stay in a Novotel Living. The first European property will beNovotel Living TallinIn Estonia we also have Mövenpick Living and Pullman Living as well as Adagio Aparthotel, the best represented extended stay brand in Europe. We created these extended stay labels for most of our brands to give investors more choices.”
In examining what these options mean for Accor's hotel development, Lassman remarked, “As a company with few assets, it's really important to us to offer our partners choice, flexibility and diversity across the brands and segments we have. If you want easy wealth growth, you need diversity. It is necessary to give investors a number of options.
"A lot of people say, 'Accor has too many brands.' "I've never heard anyone say that Kellogg's or Unilever have too many brands. We don't have too many brands because investors want to choose but don't want to choose from the 40 brands. If you want to develop a hotel, appreciate the choice between two, three or four brands relevant to your vision for your project.”
Along the road
When asked about Accor's future, Lassman concluded: “My focus is on low-asset organic growth. In recent years we have been number one in contracting and opening hotels.
“If we continue on the path we have taken, we will grow even more in Eastern Europe. We like to scale markets, but we've also spent the last year seeding emerging markets because they will be the next mature markets. We are a dynamic team opening many fantastic hotels.”