Although the pandemic made hoteliers reconsider hotel development scenarios and developers had to hit the pause button for a while, Gaurav Bhushan, global chief development officer, Accor, assures that Accor’s pipeline of projects in India continues to be stable and that they have not seen any attrition. In conversation with Express Food & Hospitality, Bhushan underscores the French hospitality major’s future global development plans and its vision to introduce its youngest brand TRIBE to India
How does the development scenario look for the hospitality sector globally at large and India in specific?
The pandemic made us all reconsider hotel development scenarios and developers had to hit the pause button for a while. They made a significant work re-evaluating constructions and projects by measuring risks and opportunities in the current context. Government restrictions due to lockdown, uncertain financing construction in the next months or potential decrease number of projects were amongst the factors to consider. However global teams took each stage of hotel development cycle and rethought planning, negotiations, delay in construction schedules, staffing and training for hotels to be opened soon, etc. Globally there is a post-pandemic development momentum in areas where lockdown has ended. This momentum is picking up since June and Accor net growth rate registers great results in Q1 2020 and is performing well comparing competitors.
Specifically, in India, while there has been a definite impact, because of the pandemic and resultant restrictions and continued impact on financing, we actually see some positivity, having added to our pipeline during the first half of 2020, including projects that will commence operations by early 2021. That is not to say that we are seeing a similar pace of development as previously, however, we continue to have meaningful conversations with existing partners and hotel investors keen to work with Accor who see long-term value in the business. In particular, we are seeing some very interesting opportunities for growing our economy, midscale and midscale-lifestyle brands and some selective franchising opportunities.
How has the pandemic impacted Accor’s development globally? What strategic approach have you devised for the development of properties already in the pipeline in due course of time?
The whole world is currently facing an unprecedented pandemic in our current decade and it has big consequences for our industry. For Accor, the absolute priority is people, and this is exactly what the Group is focused on. In terms of development, we had to reconsider our strategy: openings and/or signings are delayed due to the lockdown period but are still in pipeline. Also, thanks to a wide variety of conversion brands, Accor and its partners glimpse great opportunities to convert properties. Despite this crisis, our pipeline remains stable and the Group pursues its development strategy and work hand in hand with its partners to open hotels and adapt security and sanitary standards while delivering very qualitative products.
Accor’s pipeline of projects in India continues to be stable and we have not seen any attrition. Our discussions with our owner partners indicate their commitment towards completing projects; construction and project delays will of course happen, and we are continuously engaging and working with our partners to provide them any support needed.
We will adapt our offer to new demand and new requirements. We expect our customers might want to travel differently in a more responsible and safe way and we are exploring what this means for our products and hotels under construction. Our long term, the well-balanced strategy remains the same – we are learning, we will continue to be flexible and adapt.
How do you see the Asia Pacific as a market for Accor’s youngest brand Tribe?
TRIBE, one of the most recent additions to Accor’s portfolio, is a bold and contemporary brand that expands quickly. This lifestyle brand is exceeding expectations in terms of development and is growing globally. With a first and successful opening with TRIBE Perth (Australia) in Pacific Asia, the brand pursues its path with upcoming openings such as TRIBE Paris Batignolles or TRIBE Amsterdam. In addition, numerous projects are currently being finalized in iconic European cities like London, Brussels or even Lisbon and obviously, with more than 150 projects due to open in the next five years, TRIBE will arrive in Asia Pacific soon and will unveil new outstanding properties in key gateway Asian capitals.
Are you eyeing to develop Tribe branded properties in India considering its high millennial demography?
Definitely. We are obviously considering developing TRIBE in all Indian major cities. We see an opportunity for a design-driven, yet a refreshing product that adapts itself to newly built hotels, conversions and adaptive reuse. The latter gives us the ability to look at building conversions as different real estate opportunities open up because of the pandemic. We are very keen to explore this space. The uniqueness and flexibility of each individual product are supported by an opportunity to limit development costs and subsequent return on the project investment. New Delhi, Gurgaon, Mumbai, Bengaluru, Goa would definitely be markets we would be keen to introduce the brand.
What will be the future course of development for Accor in the new normal?
As a leading group, Accor operated great changes throughout the last years and built a strategy in accordance with hospitality, travel and modern tourism. Accor hotel development has grown significantly with major mergers, acquisitions and creations of hotel brands (Fairmont-Raffles-Swissôtel, Mövenpick or Tribe to only name a few) which came to reinforce Accor brand’s portfolio. In order to continue to offer great services and concepts that match the client’s expectations, in the new normal, Accor will continue the development of its global hotel brands internationally by being as flexible and agile as possible as soon as things get back to normal. The Group bolsters growth on its premium and luxury brands like Raffles, Fairmont or Sofitel, and will maintain its leading position on lifestyle segment thanks to 11 disruptive and contemporary hotel brands (Mondrian, Mama Shelter or Tribe) which get a foothold internationally with already great openings scheduled. Finally, as a part of our development strategy, we are strengthening our footprint on the residential segment to enlarge our activities and confirm our leading position in these segments.