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Major changes in Accor’s new strategy

SBazin@Crédits_Stéphane Richard - EDITED

Accor has announced a new strategy the company says is aimed at enhancing growth while being a leaner and more efficient organisation.

Paris-based Accor’s new Chairman and CEO, Sebastien Bazin, revealed the changes this week (Nov 28) that includes two core missions for “maximum operational performance and sustainable growth”.

The missions are: HotelServices: a hotel operator and brand franchisor that will be fee-oriented and P&L driven; and HotelInvest: a hotel owner and investor that will be yield-oriented and balance sheet driven.

“Accor is a strong and unique group poised to derive benefit from rich opportunities,” Bazin said. “However, it deserves a much higher ambition to create sustained value.

“It requires the in-depth, rapid transformation of both its business model and its organisation, as well as a clear and long term vision, and to stay the course.

“With this new strategy, our aim is to unlock Accor’s full potential through its two core activities and maximize value creation for shareholders,” he said.

Accor says with the new organisation, it “re-emphasises the group’s two core competencies, i.e. asset management and services to owners, by separating their functions, their missions and their targets in order to build a better performing business model”.

It says all 1,400 hotels of HotelInvest will be operated by HotelServices through management contracts. Each business unit will have its own reporting, with separate P&L, Cash-Flow statement and balance sheet. They will report to single Executive Committee. The Group will retain key central functions including Finance, HR, Legal and Communication.

Bazin revealed Accor is also moving towards being a leaner and more efficient organisation.

The company says the group will move from the current hybrid set-up to a geography-based organization with consistent accountability in all the regions.

It says this organization structure will enable “decision-making that is closer to the frontline at lower running costs”.

As part of that, the brands will be clustered in three segments, Luxury/Upscale, Midscale and Economy/Budget with synergies in support functions across the brands.

In addition, Accor revealed Sofitel would now be able to contribute its expertise to the Luxury/Upscale segment for which marketing functions will be relocated in Asia.

Accor will be also managed by a new 10-member Executive Committee that will include the five regional heads of operations, and Sven Boinet, who joins as Group Managing Director, Chief Transformation Officer, Human Resources and Legal Affairs.

The new management team “will impulse a new operating mode within the group, to enhance clarity, agility and accountability in the decision process”, according to Accor.

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