We meet Puneet Dhawan, Senior VP-Operations, Accor India and South Asia, to unravel what’s up with the chain in the Indian market.
How are you looking forward to 2021? I understand green shoots are visible, though fresh irritants keep cropping up alongside. How do you assess the big picture?
2020 has certainly been a game changer year for the industry. In terms of planning, we have pivoted from the usual short and long-term plans to take a more flexible approach by concentrating on our ALLSAFE protocols & messaging. We are staying agile, keeping an eye on changing trends and swiftly working with our teams across to deliver the best of our services to guests. We are looking at everything quarter by quarter to stay aligned with changing guest’s preferences and restrictions by the government and travel policies. The future is still unknown, though we are cautiously optimistic about 2021.
Especially for Accor, how do you see this picture emerging in India?
We are vigilantly observing behavioural changes in guests and adapting by devising campaigns that fit needs and demands. So far, our campaigns and strategies have been appreciated by the guests & clients alike. We have witnessed positive outcomes and a gradual uptick in occupancies in the second half of 2020 through our campaigns like ‘Lets Us Take Care of You’ and ‘For the Love of Travel, For the Love of Now’ and Missed Celebrations. We will ramp up similar successful offerings in 2021 as well. We are also taking a renewed approach towards our existing partnerships and campaigns this year and continue providing our guests the most memorable experiences curated by our loyalty programme ALL – Accor Live Limitless.
For weddings, Accor has rolled out a new initiative called ‘Vivaah at Novotel’ which is adequately conceptualized for the contemporary virtual weddings and offers an array of customized and flexible packages for our patrons. Leveraging 20 Novotel properties across 15 gateway cities across India, we are providing guests an opportunity to connect with all their relatives and friends to join in for both physical and virtual celebrations, while maintaining social distancing norms. An interesting shift was the uptick in the demand for social events at the ibis hotels, which is an economy brand of Accor. We have 19 hotels in India and hotels in few cities have hosted many small pre-wedding and wedding events.
Overall, we feel that the hospitality industry will remain dynamic but will now be extra cautious, agile and innovative.
How is the pipeline looking for 2021? And for the next few years?
As one of the leading international operators in the country, we continue to grow our network with our owner partners on the back of a strong development pipeline. 2021 marks the launch of the first Raffles in India, one of the most luxurious and coveted brands in the world. This is a milestone for Accor India as it expands our luxury portfolio in the country and will be the 10th Accor brand available in India and South Asia.
Novotel, which now forms the largest network of midscale hotels in the country with 20 hotels operational, will see the addition of five more properties to its portfolio. Last year we announced the signing of Novotel Chandigarh Tribune Chowk which is expected to open this year. There is an active pipeline with more Novotel hotels coming up over the next few years. Our ibis brand in partnership with InterGlobe Hotels continues to expand with the opening of ibis Vikhroli, Mumbai in late 2021, making this our 20th ibis in India.
Our growth trajectory may have temporarily slowed down in early 2020, but it never stopped, and we are back to full throttle at the moment and excited for 2021.
In recent years, you have bought numerous boutique brands across the globe. Do you see entry of newer brands in India and our region? Is India ripe for some?
Accor’s approach overall on its brand strategy has shifted from “product centric” to “client-centric, that is, focusing more on serving a customer in all their varied personas and changing needs.
Accor has a portfolio of over 40 brands. Some of the brands are local and some global – the rationale is brands are a short-cut to a decision-making process in a crowded marketplace. Accor identified a gap and made it one of its key strategic growth pillars to focus on the luxury and lifestyle segments. The intent was and continues to be that Accor creates an extensive and comprehensive portfolio of brands that give all the options to guests, positively impacts guest acquisition and retention with options of the new product combined with our loyalty program. The brands available in India have been able to create a niche for themselves amongst the rich base and varied needs the country has in abundance.
Typically, how do you see Indian hospitality industry emerging, what are the challenges overall for your industry?
Depending on how long this pandemic continues to disrupt travel patterns and buying behaviours (especially international travellers), the survival of the unbranded and independent branded hotels will be at risk. This will lead to higher brand conversions globally as well as in India. Moreover, the organisation structure across the board will be flatter and leaner with a mission to move to a variable cost model as much as possible. Touchless hospitality and a booming technology adoption in the industry set the tone for a rise in cashless transactions for the hotels sector. While innovation brought in by technology will be adopted, however, it is important to note that the purpose of technology is either to make the operation more cost effective or enhance the guest experience. On the development front, strategic investment opportunities will arise as hotel assets become available. Business travel and MICE will be the slowest in its recovery and hence hotels will need to look for alternate revenues to make up for the loss.
Having said that, the growth and development of travel related infrastructure plays a pivotal role in any developing economy and will continue to do so in an underserved but growing market like India. We believe that the hotel industry in India is highly dependent on tourism, hence government initiatives play a crucial role in aiding the expansion of the industry.
If you look at pre-covid situation, I am not sure if Accor has reached its true potential, given your multiple strong brands. You also seem to have some strong brands and a few that have yet to emerge out of their shadows. What is your impression? What more would you like to do to increase your presence in India, and also to add some of the very strong brands you have acquired globally?
In India we have a focused yet differentiated brand portfolio – with the brands in the country being complementary and in line with our growth strategy. We now have nine brands across the luxury, premium, upper midscale, midscale and economy segments – operational and under active development. We develop and launch hotels based on the demand from a specific market and its business potential. We are also focussed on expanding our luxury and premium brands portfolio in India, in particular with the Raffles, Fairmont, Sofitel and Pullman brands. We are keen on such opportunities in India, particularly in key commercial hotel markets and in existing and untapped leisure locations. For our luxury brand Fairmont, we see opportunities for development in markets such as Mumbai, Gurgaon, New Delhi, Bengaluru, Hyderabad, Pune and Goa and various other leisure locations. We are actively engaged with some of our key partners for some of these developments. The brands have a strong focus on the meetings and conventions market as well as the weddings and socials market and extremely high brand recall. We will continue to densify our existing brands portfolio in the upper midscale and economy segments, in particular the Novotel, ibis and ibis Styles brands.
Lifestyle, entertainment, places with a soul have been at the heart of our global development and growth strategy over the last years. Taking this philosophy ahead, Accor recently announced joining forces with UK-based developer Ennismore, owner of The Hoxton, to create a new global lifestyle hotel company. The new entity will operate under the Ennismore name and will have 12 brands including the Hoxton, Mondrian, Mama Shelter, 25hours and TRIBE. Globally Accor is the leading lifestyle operator in the hospitality sector, focusing on one of the fastest growing segments of the industry. We would definitely like to explore the Lifestyle brands from our stable for the Indian market.
Resorts are key priorities for us in destinations such as Rajasthan, Goa, Kerala, Coorg, various hill stations across the country, wildlife sanctuaries, tea estates and other areas in the north east of the country are some examples.
Is there any plan to buy into any Indian brands, grow inorganically, like you have done a few purchases internationally. I can see some Indian small niche groups could be a perfect fit. Any thoughts?
As you can understand, as a listed entity we cannot speculate on M&A. Having said that, we are always keen on exploring the right opportunities to give the network strength a boost.