Accor Hotels – Report Back

23rd  February 2024

Accor operates 5,584 locations in over 110 countries. Its total capacity is currently 821,518 rooms (end 2023). It owns and operates brands in many segments of hospitality: luxury (Raffles, Fairmont, Sofitel), premium (MGallery, Pullman, Swissôtel), midscale (Novotel, Mercure, Adagio), and economy (Ibis, hotel F1). The shares will cost you €40 each – it’s a French business. In terms of properties, it’s the biggest chain in Europe. Its global turnover last year was over €5 billion.

And yet it owns virtually nothing, and is one of the most asset-light operations you’ll find anywhere – which results in great advantages, and sudden catastrophes, as we were about to find out.

You didn’t know any of that, did you? Our guest on Friday 23 February 2024 was Richard Short, Vice President Health and Security for Northern Europe, who covers 37 countries from Ireland to Kazakhstan, “from Dublin to Vladivostock.” A far cry from the “shadow of the Corby steelworks” where he was born; as a youngster he heard a recruitment talk given by Wigan Council who were seeking Environmental Health Officers and would pay for them to go to university. Richard was lured in, qualified and clearly relished every aspect of his job. He specialised in food hygiene and infection control; he could close premises on the spot, but also dealt with disputes about noisy neighbours, so diplomatic skills were necessary. After a while he set up his own consultancy, with Accor as a client. Eventually he joined them full-time, and has worked with them now for over two decades.

What Accor does is branding, in partnership with hotel owners. In fact there are three layers: investors; property owners; and Accor, who “put the hotel into hotelier.” When somebody want to run a successful hotel they might invite expressions of interest from Accor, Marriott and so on; each offers different packages, but all this will require detailed knowledge of the potential of the location. Accor succeeds in part because it covers the lot: design, colour schemes (“that works, that doesn’t”), revenue management, e-commerce, procurement, selection of suppliers.. and of course employment of staff from the manager to the cleaners.

Loyalty to the brand is key, so high and consistent standards are mandatory. You can see where Richard fits in, and how important his job really is, looking after around 1,100 hotels with over 150,000 rooms.  The EHO part is essential on catering and cleanliness, but he also covers safety issues such as fire and the management of emergencies. He “travels all the time” but “the IT is fantastic” so he can do virtual inspections, and use third party inspectors as well. “My job is to ensure that duty of care is being observed,” he said.

Crisis management is part of his brief, and he took us through several examples which had hit the headlines. On 13th November 2015 terrorists attacked the Bataclan arena in Paris.. in June 2017 the London Bridge attacks.. what do the nearby hotels do? When the public are hammering at the doors to escape rampaging killers, do you let them in? What if you let in a gunman? “Let them in,” was his instruction to his hotels near London Bridge. And one of their hotels became the unofficial gathering point for the press and law officers, as well as shelter for the public. Rapid decisions must be taken in those circumstances; somebody must take responsibility and back up the local managers. That is Richard.  As he spoke, thoughts of Hotel Rwanda came to my mind.

Sometimes anticipation of a crisis is possible. As Putin prepared for the February 2022 invasion of Ukraine, intensive training was set up, talking with staff at their hotels, considering what to do if they were impacted. The confidence and clarity such preparation offered must have been a big source of support. In Poland a huge influx of over a million refugees arrived, many of them into Accor accommodation. In Ukraine itself, business soon began to recover, with security, press and media needing somewhere reliable to stay. Perhaps it’s no coincidence that two years on, Accor have actually opened more hotels in the war-torn country (I hope to get the chance to stay some day).

But “nothing prepared us for Covid,” said Richard with a grimace. With lockdown, revenue streams vanished overnight. The hotel owners (not Accor) had to pay the property costs, but Accor worked with them “to ensure that there were businesses to get back to.” It was “the busiest time ever” for Richard, but one of great stress and sadness, for although the Job Retention furlough scheme worked for them for a while, its second version, the Job Support Scheme, required employers to put in cash for “meaningful employment.” As there were no customers, no inward cash flow and credit lines had come to an end, that resulted in swathes of their workforce being made redundant overnight and 1,000s lost their jobs in the UK.

In some locations, as the government ordered that the homeless be housed, a few hotels became hostels; “that is a decision the investors take,” Richard pointed out. It’s way above the pay grade of managers or brand owners. So around 10% of previous staff could be re-engaged. Once Covid was over, the Border Agency and the Home Office started housing asylum seekers and evacuees from Afghanistan which is now coming to an end.

The upside of Richard’s job is the glory of hotels like London’s Savoy, or the new Ibis Styles in Piccadilly Gardens, Manchester where the theme is rain: “umbrellas hang from the ceiling, wellies on the front door, while in a tribute to worker bees, the gents’ urinals are honeycombs.”  I kid you not. And the new Raffles, in the Old War Office in London, where a room will set you back over a thou a night. Lucky geezer gets to stay there whenever he wants. He denies this, OK, we believe him … ?

We brought him back to basics by asking about bedbugs, on which of course he is an expert. These tiny parasites don’t live in beds, he told us; what is visible, if you lift up the sheets near the bedhead (“they like carbon dioxide”) is their bloody faeces. They can survive for months without feeding, but once they have a prey – one of us – they’re voracious. What’s his advice? “If that happens, go to reception and ask for another room…” presumably taking the evidence of your bitemarks with you. Airport hotels, where guests are in and out very quickly, are a particular problem. Bedbugs hang about in corners and carpets, but are eradicated with chemicals. “If you see traces of white powder in your room, that might not be signs of a party last night; it could be high standards of cleanliness.” Hmm.. but to avoid bringing them home, don’t ever put your suitcase on the floor, use the stand provided.

He did assure us that there’s been no upsurge in infestation, and that the fake news row about outbreaks in Paris might be something to do with the upcoming Olympics. So now you know.

Overall a scintillating talk from a remarkable man in a highly successful international business. We are very grateful – hasta la vista, Richard!