Brand diversification
Accor’s brand segmentation is significant to the group’s Middle East growth strategy. Initially driven by the luxury brand Sofitel, the region is also strong for Accor’s other brands lower down the hotel scale — indeed, the launch of the Ibis and Novotel cluster at Dubai World Trade Centre set Accor apart as a pioneer in this sector, with the establishment of international midscale and economy brands in the Middle East emulated by other global chains soon after.
Since Sofitel first launched, the brand has undergone a complete repositioning worldwide and Accor — traditionally known as a company specialising in the economy and midscale sectors — has “now gained some legitimacy in the luxury and upper segment,” explains Caillère.
In addition, the upgrading of Sofitel, now competing with true luxury brands such as Ritz-Carlton and Four Seasons, left a gap for a new brand, hence the introduction of Pullman — one of Caillère’s priorities for 2012.
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“Basically we have created a segment for us, a segment that Hilton or Sheraton is operating today, and this is why we have launched Pullman,” says Caillère. “Pullman is one of our biggest potentials of growth. So far we have almost 50-plus hotels in the world; by the end of 2011 we should be around 52 or 53 hotels.”
The brand is quite strong in Asia, with Europe, Middle East and Africa identified as the next stages of development. Some Pullmans have been converted from Sofitels, the company is rebranding a Hilton and a Le Méridien in Paris as Pullmans, and others will be new builds.
Caillère explains the process behind introducing the new brand: “When I joined the company, we had 206 Sofitels but it was a mixed bag between three-plus star hotels to luxury hotels. So I said at that time, ‘when you are in the luxury segment you have to be very consistent and we can’t do it with that’, so we basically cut the network of Sofitel by half.
“We took out 110 hotels and we have added new hotels and in Dubai this is the case, we have two to come in the next few years — one on Palm Island and the other one off Sheikh Zayed Road. Step by step we have picked the best of the network or renovated them or signed new deals.
Sofitel now is recognised as a luxury brand, if you look at the last J.D. Power Survey, we were rated in the luxury segment, no longer upper upscale, and they put us above Hyatt, Westin and InterContinental. That was great news,” reveals Caillère.
“And then, when we have taken out these 100 hotels, some of them were meant to be big convention hotels, airport hotels; that was Pullman and so we started with that.” Sounds simple really, but why would a company with so many brands already need to add another?
Caillère says there are two reasons for offering such a diverse portfolio but again it comes back to consistency — for the owner and for the guest. He uses examples of Novotel and Mercure — both midscale, typically four-star hotels — to explain.
“What we discovered is some guests are looking for reassurance, they want to make sure when they go to a brand there is no surprise. Years ago, a surprise in the hotel business meant a bad surprise.
“So this is why Novotel was so successful because every Novotel environment is exactly the same,” he says. Mercure was created to meet the needs of guests at the opposite end of the spectrum: “Some guests don’t want to always be in the same hotel and there is a real need for that”.
“So we created a brand at this segment; it is almost the same price, but we have to give some [consistency in the] level of service but we don’t want the guest to have the same room wherever they go,” says Caillère.
There are benefits to the owner too; a Novotel building is standardised, there is more flexibility with a Mercure making it ideal for conversions.
“It’s much easier as there are no real fixed standards; it’s more on the soft side,” says Caillère.
But what if Pullman, Novotel or Mercure don’t quite fit a desired target market, such as the Chinese population? Well, if the market is big enough,which China is, Accor is prepared to be even more flexible.
“We thought we had enough brands, but in fact what we have discovered is the Chinese, the real Chinese living in China, want something better than the Mercure but very Chinese — a product between Pullman and Mercure,” observes Caillère.
“So what we’re going to do is to launch a Grand Mercure because they want something grand, but like Mercure in other ways, but with everything Chinese and Chinese food — this is a way for us to enter deeper into Chinese market.
“This is not something for us to do everywhere but where we see a big market, China, is contemplating a specific need we think we have to do it. The team is there and since we launched it, we are signing Grand Mercure quite fast,” he reveals.
Accor has also recently regrouped its budget brands under the Ibis name, the “Rolls Royce of economy brands,” says Caillère. Ibis still exists, but is being extended with all Accor’s former Etap hotels being rebranded as Ibis Budget — priced roughly 30-40% below the normal Ibis — and the All Seasons brand being converted to Ibis Styles, which meets the needs of economy travellers looking for design concepts.
“What we found is the brand awareness of Ibis is so strong we thought in terms of guest perspective and owner perspective, if you want to give more strength to your brand and development, it was easier for us to put Ibis as the mega brand and to rebrand Etap to be Ibis Budget,” Caillère explains.
“It’s not just a matter of changing the signage, it’s to revisit the concept and to give more freshness, revisit the product itself, the level of service, and to work much more on the bedding side,” he adds.
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