Executives from the hotel,
cruise, tours, retail, OTA and destination marketing sectors talk about their assumptions and plans for the year ahead. The interviews
were conducted by Travel Weekly editor in chief and senior vice
president Arnie Weissmann.
Sebastien Bazin, Chairman and CEO, AccorHotels
My view, which is just very optimistic, hasn't changed for the last four years. We are in a blessed industry where we have a lot of visibility for the next 20 years: The number of international travelers, about 250 billion people, is increasing by 5%-plus per annum and that could rise in the next 15, 20 years it's likely to be triple that number. And the good news, as well, is the hotel supply is only increasing by half that on a global basis. It is a big industry and growing.
When it comes to economic cycles, I'm a bit of a contrarian. Financial analysts have been telling me, "You know, the up cycle is going to end in America because it's been the longest ever, and growing for the last eight years." I respond, "You are absolutely mistaken." The previous cycles they refer to were before the digital world. You may very well see cycles that last 15 or 20 years because businesses have so much better information. And the true cost of travel today is probably one-third less than what it was six years ago, before low-cost airlines, before database knowledge and client-centric focus.
Because the hotel industry is scalable, because it is visible and because it is big, you have a lot of players from the digital economy Ctrip, Alipay, Expedia, Booking.com, Airbnb who challenge us and benefit from our growth. My idea is to benefit from their growth. We have to both resist and adapt to industry mutations.
I'm spending half my time trying to adapt and benchmark my old traditional industry to the new industry. I'm not doing it because I like to, I'm doing it because everybody could be disrupted. You see it with Google disrupting TripAdvisor it took one year for TripAdvisor's market cap to drop by 50%.
You have a lot of players from the digital economy who challenge us and benefit from our growth. My idea is to benefit from their growth.
My theory is you cannot only rely on travelers using hotel rooms for growth. Five percent growth is magnificent, but not good enough. The value of the digital economy, whether it's Facebook, Amazon, Google, Alibaba, Pinterest, WhatsApp, is linked to usage and the number of touchpoints, the interactions between a user platform and the users. People in Europe open their Facebook page seven times a day. How many times do they come to my hotels? Maybe three or five times a year, which is unbearable. But I can't ask them to stay with me even once a week, because they don't travel that frequently.
We have 7.5 billion people on the planet, of which 1.3 billion travel. Of the 6.2 billion not traveling, 1 billion live in large cities where Accor is at its best. So, if I want to increase the number of touchpoints, I need to be closer to travelers when they're back home. I need to be embedded into the local economy far more than the travel economy. That's feasible. We call it Accor Local, and you're going to be seeing it bear fruit in 2018 and onward.
With Accor Local, we offer hotel facilities to nontravelers for day-to-day life, whether they want to drop a package for someone, have their shoe repaired, pick up some food or take a yoga class. We can help local merchants pharmacists, florists, others expand their hours, because in Europe, they may have to close shops at 6:30 or 7:00 p.m., and after they close, people can pick up their orders from us. And maybe they'll discover and love our piano bar.
We'll not only be interacting with our guests when they aren't traveling, but we're interacting with people who never travel. And enhancing local businesses. We're amortizing the capital intensity of 4,300 hotels and a labor force of 270,000 people while expanding the diversity of our clientele, all at a very marginal cost.