A Signature Media Publication

AccorHotels rebranding exercise in Dubai

In a recent development, AccorHotels announced the extensive conversion and rebranding of a former Sheikh Zayed Road landmark into the Mercure Dubai Barsha Heights Hotel Suites & Apartments.

The property is currently undergoing the first of a two-phase comprehensive refurbishment and is expected to open under the Mercure brand by late May 2017.

The property will feature 120 rooms once renovated, as part of the first phase. The second phase of renovations will focus on additional guestrooms and facilities. This will enhance the hotel from a four star ranking into five stars in the form of hotel suites.  The renovation and refurbishment is anticipated for completion by end of 2018. Upon opening, the 1,015 room hotel will be the largest Mercure property in AccorHotels’ global portfolio.

The upscale hotel and apartments will feature hotel suites alongside one and two bedroom apartments, as well as an all-day dining restaurant with a shisha lounge, two specialty restaurants, lobby lounge, health club, spa and swimming pool. As part of the extensive refurbishments, a new specialty restaurant and meeting room facilities will be added.

The Mercure Dubai Barsha Heights Hotel Suites & Apartments joins the Mercure portfolio of 23 properties currently in operation and under development in the Middle East. AccorHotels has 38 existing properties in the UAE, in addition to 22 others under development. In the Middle East, AccorHotels currently operates 94 hotels encompassing 28,500 rooms across the luxury to economy segments. The Group’s regional network will double in number, bringing close to 26,800 additional rooms to the Middle East.

AccorHotels continues its Africa expansion

AccorHotels announced the signing of a hotel management agreement (HMA) with New Mauritius Hotels Limited.

The agreement will see AccorHotels re-launch the existing property under the Fairmont Hotels & Resorts brand in May 2017. The hotel will also offer an expansive 6,608 metre, 18-hole golf course created by architect Cabell B Robinson.

Olivier Granet, chief operating officer and managing director, AccorHotels Middle East & Africa said: “Morocco is a strategic market for us and one in which we are witnessing solid momentum. With 37 hotels currently within our portfolio, we look forward to complementing the country’s already robust tourism development plan, and to reinforce our global development objective for Africa overall by doubling our network to reach 200 hotels.”

The property will feature 134 guestrooms including five Presidential suites, one Penthouse suite, and 10 Prince villas, the resort currently also offers 94 private residences consisting of two, three and four-bedroom villas. Subsequent phases of the development will include both Fairmont Royal Palm Residences and Fairmont Royal Palm Estates. Currently under development, the branded residences will be serviced by Fairmont.

The resort currently features four restaurants and lounges including Le Caravane, an international restaurant on the terrace; L’Olivier, serving Mediterranean cuisine; Al Ain, a traditional Moroccan restaurant; and Le Bar. Due to open shortly, The Golf Course Country Club will comprise of a lounge, restaurants, and a health club and swimming pool.

Additional facilities include a swimming pool as well as a spa including a private area reserved for women.

With more than 70 hotels worldwide, Fairmont continues to expand globally with recent openings including Fairmont Quasar Istanbul, Fairmont Chengdu in Western China and Fairmont Fujairah. New luxury hotels scheduled to open later in 2017 include the 317-room Fairmont Amman, the 298-room Fairmont Riyadh and the 1048-room Fairmont Austin in Texas. Other hotels in development include Fairmont Kuala Lumpur, Fairmont Jeddah Hotel & Resort and Fairmont Costa Canuva in Mexico’s Riviera Nayarit region.

The brand is also expanding in Morocco with other luxury developments. Fairmont Taghazout Bay will be a 155-room luxury property featuring 52 Fairmont branded villas, while Fairmont La Marina Rabat-Salé will be a 200-room luxury hotel. Both hotels are currently scheduled to open in 2019.

Mindset Change = Business Change

Following the 2008 global financial crisis, one Chinese businessman observed, “With the best and brightest from the top business schools and advice from top consulting firms, the Western companies still didn’t see the crash coming”. Actually, some did, but simply knowing makes no difference. Those who suspected the looming financial disaster took no action. Knowledge is meaningless if no action occurs as a result of “knowing”. A good example is when, in mid-career, employees earn MBA degrees with honors for career advancement. It makes no tangible difference and adds no real value to the company if those graduates return to “business as usual” principles.

The way we work, as corporate leaders, utilises a winning formula we developed early in our careers. In hospitality management, this may include exercising authority, giving instructions, follow-up, and having an eye for detail. This management positioning will get things done, get you noticed and promoted, and that formula for success seems to be the way to climb the career ladder as a valued company executive.

Toward the top of the hierarchy within a hotel company, things change. Now, the manager needs to get things done through and with people who are not subordinates; they are business partners, owners, suppliers, and competitors who need more than authoritarian guidance. With the wrong leadership tactics, you’ll discover your peers may respond negatively, making a collaboration more like a confrontation. You’ve seen owner-operator relationships deteriorate when one or the other crosses the line into aggression or bullying. Authoritarian hierarchies – and they’re found in every company – do not encourage change, innovation or even management ideas from younger, newer executives. The righteousness of authority suppresses input from below.

Sébastien Bazin, CEO of AccorHotels knows all this and more. He was the keynote speaker at HICAP (Hotel Investment Conference Asia Pacific) 2016, and said his job within his company of more than 240,000 hoteliers with 4,100 sites is to awaken a “sleeping giant”.

Corporate giants move slowly

Harvard’s Rosabeth Moss Kanter analysed the mega-corporate environment in her book, When Giants Learn to Dance. As early as 1989, she suggested large corporate “giants” should look to replace their bureaucratic environments with faster, focused, friendlier, and flexible business plans.

Almost three decades later, Sébastien Bazin says giants of the hospitality industry are not yet dancing; they are asleep. However, he seems to be in step with the music. He offers a perspective from the 1960s to 2000, a period when a handful of global hotel companies competed with each other in an industry with a steady demand at five per cent and a supply growth of two per cent.

By the millennium, the music had changed. Digital innovators and OTAs (online travel agents) targeted a piece of the hotel pie. Next came the metasearch (internet searches that use another search engine’s data to produce their own results) innovators such as Trip Advisor, followed by the introductions of service apartments like Airbnb, that created a new service niche and effectively closed the gap between supply and demand.

Online innovators have grabbed a massive 25% of the hotel industry, and Bazin predicts that this will rise to 45% in the next five to seven years. How could they do this right under noses of the hotel industry? Did someone notice – and do nothing? The explanation, according to Bazin, includes certain dynamics:

  • Most of the “creators” are under 35 years of age
  • They create from scratch, without a legacy holding them back
  • They utilize newer, better technology and invested more resources
  • They see their audience as global first; they don’t “start small and grow”
  • Their organizational structure is flat and therefore unlike the tiered, pyramid organization charts of the hotel industry
  • The digital players hold their clients up-close and personal, with weekly – even daily – communication and follow-up; hotels are brand- and product-centric with touch points focused on the guests inside the hotel

Knowing change is needed – and doing it

AccorHotels noticed the problem and are now taking action. They have created a shadow board of directors from the company’s best and brightest 25-30 year-olds. They have the same access to information as the “real” board of directors and now, corporate decisions are made after the shadow board reviews proposals.

Sébastian Bazin asserts that breakthroughs in the hotel industry come from newcomers, “upstarts” who disrupt the status quo. That kind of dramatic innovation rarely comes from long-timers in established companies. Many companies seek talent that will “fit in”. Those new managers settle into a comfort zone of safe tweaks and modest growth, so they survive and perform predictably within a status-quo culture.

How can these well-established companies create performance breakthroughs, or are such innovations forever the exclusive domain of outsiders and newcomers? How can established companies achieve dramatic and exciting top- and bottom-line growth? These days it seems many flagship companies avoid confronting the issues, and in doing so become ripe for acquisition. In the changing of ownership, they do transform but only in order to fit in with the culture of the new parent company.

You can change your name – or change the game

Your company can realise a transformation without the trauma of an ownership change. However, you must be prepared to go through an equally daunting transformation of the corporate culture. This requires the transformation of every employee in order to give up the collective deference to legacy, outdated values and self-imposed constraints that are the barriers to innovation and dramatic growth. Because the transformation of a company depends on the transformation of every employee it is a challenge few companies have the courage to undertake. Individual mindsets need to change in order to develop a new strategy for business operations. Without it, your business plan’s design will be limited to the horizon limits of your own corporate culture – that same mindset that is losing ground in a competitive market.

It’s understandable: Within the company, management leaders’ individual winning formulas got them where they are today; they are reluctant to change what worked for them. Be warned: Some managers may sabotage, discredit, and undermine new notions before they’re explored.

If you put a plan in place for a new corporate direction – a new company strategy – without change at every level of operation, you’ll realise what business philosopher Peter Drucker once observed: “Culture eats strategy for breakfast.” Your giant will yawn, roll over, and go back to sleep.