Interview: Accor Distribution VP Ludovic Dupont And Sales VP Kerrie Hannaford

Other than 1,200 economy-tier Motel 6 properties, Accor has a small North American presence for its economy Ibis, upscale Novotel and luxury Sofitel brands. However, as the largest operator of hotels globally, the company considers North American business travelers one of its more crucial customer bases. Accor vice president of global sales in North America Kerrie Hannaford, and Ludovic Dupont, the company's vice president of distribution for travel agencies and meetings and events, recently spoke with BTN lodging editor Michael B. Baker about the company's efforts in the region and its global outlook.

What's your outlook for upcoming corporate negotiations?

Dupont: TMCs are getting more top-rate business for hotels, particularly in Europe. The TMC business is up by 25 percent with Accor since the beginning of this year, just because of the natural increase of the market. The TMCs are getting more hotel bookings for their clients, and we are gaining market share.
Hannaford: We're still very optimistic in terms of our objectives. You never know when things are going to be unstable, like in Egypt and London. Usually, we find that it eventually balances itself out. All of our core markets are still hopping. It's very positive for us. We're showing some good growth, both in occupancy and average rate. In order to stay abreast in terms of what's happening with the corporate market, we have an advisory board made up of different large corporate accounts, and they help us in terms of testing the temperature of what they're forecasting for travel programs. Some of the big programs, like Deloitte and KPMG, if they feel their growth is positive and they've got projects happening globally, that augurs well for the season moving forward. We're still optimistic, cautiously optimistic. It's not nirvana, but if things stay calm, it'll be a good season.
Dupont: TMCs are getting more top-rate business for hotels, particularly in Europe. The TMC business is up by 25 percent with Accor since the beginning of this year, just because of the natural increase of the market. The TMCs are getting more hotel bookings for their clients, and we are gaining market share.

How important is business travel for Accor?

Dupont: At Accor, the baseline of our business is business travel. We have around 40,000 contracts worldwide, and it's taking on more importance in our policies. The second part is for meeting events, and the big trend there is the move to manage meetings and events within businesses. We are working with clients to develop loyalty and get more market share in that area.

Do you have any plans to grow your sales force?

Hannaford: We're looking toward doing that, particularly from an e-commerce perspective. We're noticing growth and potential there. From a corporate perspective, there might be some potential to expand with adding a few more strategic account directors. There's certainly enough business to warrant that for 2012.

Being based in Europe, what's your approach to sales in North America?

Hannaford: The United States and Canada are the largest feeder markets for Accor worldwide and are serviced by our global sales offices in New York, Toronto and Los Angeles. We predominantly look after the hotels in our network, in our backyard in North America, but more importantly, we feed our network in South America, Asia/Pacific, Europe and the Middle East, including increasing the loyalty program that we have, A Club. It's still in its infancy. It will be three years old in October. So, even though we've got a long way to catch up to the big boys, we know that the program we have is first-class. What we find is that the American customer is so used to loyalty programs that they adapt into it very well. Even though we have a small exposure hotel-wise, with flags in the ground, the organic growth we're seeing with A Club is phenomenal. They know loyalty programs and buy into it straight away, and they feel very comfortable with the fact that when they're traveling abroad, they can stay in a hotel and get points.

Do U.S. clients push for loyalty programs more than European clients?

Hannaford: The birthplace of loyalty programs started with U.S. companies, but it's just as critical in Europe. They may not be as motivated by points, but human nature says when you come to the front desk, you want to be recognized, hear "welcome back" and be treated as a familiar guest. That's comforting. Whether you're European, Chinese or Indian, you love that welcoming factor, and that's why loyalty programs are so successful, because they make you feel special.
Dupont: We are number one in Europe, we are number one in Brazil and Australia, so when you're number one with a big network, it's easier to promote your loyalty program. People know you, and there are more opportunities to earn miles and points.

Have you seen more clients accept dynamic pricing models?

Hannaford: We've seen a lot more acceptance, particularly this year. We've got a corporation program called global account offer, and it offers the flexibility that people can have a contracted flat rate from the normal RFP process but they can also sign up if they meet the business requirements. They love the idea knowing that there's a corporate contract still here as well, and that's for their mainstay business.
Dupont: Still, a significant part of the companies want to keep the fixed rates, so we take that into account.
Hannaford: You see SMEs very comfortable, because they're the sort of people who are booking online anyway, going to the online travel agencies to make their bookings, so they're comfortable in booking dynamic pricing and understanding that buying a hotel in New York on Friday night is going to be a little more expensive than, say, Sunday night or Monday night.

What's Accor’s strategy in the emerging markets?

Dupont: In Brazil we're number one already, and it’s booming. In Russia, we have plans, but we are a little late. China and India have the biggest developments, with new Sofitel and Ibis properties. We have big developments in the upscale and economy segments, but in China, it's more Ibis. In India, we're opening the Sofitel in Mumbai [in November]. We have a general sales agent in India that will help us beyond the Accor sales force to develop in areas where we don't have the capacity to build a relationship with corporations and travel agencies.
Hannaford: It's important also to understand culturally what happens in those countries. By us putting a GSA in India, they're locals. They know how to weave in and out of relationships and partnerships and get the contacts rolling. In those markets, it's essential to have the local knowledge, and that's what’s made Accor very successful.
Dupont: We are running convention centers, like in Hyderabad. There's a Novotel hotel linked to the convention center, and we are managing the convention center.