Carlo Olejniczak
Los Angeles - Accor Hotels senior vice president of global sales Carlo Olejniczak in late July discussed with BTN editor-in-chief Chris Davis the implications of the global hotel company's move to a Salesforce customer relationship management system, the state of corporate negotiations, business travel and meetings demand and Accor's distribution strategy. An edited transcript follows.
What's your current sales strategy for the business travel market?
Our strategy is basically to focus on "strategic" and "key" partners instead of addressing the entire world. We have a list of about 500 accounts in the corporate world that are either strategic or key. Strategic [are those with] the highest potential and the highest level of productivity, and [we] provide them with global account management. We have a global account at the world level, which is usually where the account office is located. It could be anywhere in the world. For all these accounts, we make sure that wherever they have subsidiaries or activities, we have a contributor that will be coordinating all the activity for these accounts in their region.
Because we have considered that the more we increase the level of collaboration between our people, the more efficient and the better the results, we have deployed a new service management tool for all of them, which stays on Salesforce, which we implemented in April [2013]. Today, our 700 service people are all connecting on Salesforce so they can gather all clients' intelligent information, on the tool. They can work globally on the account plan. This makes sure that when someone signs a contract with IBM in Brazil, the account leader based in New York will know about it.
The next step is to connect our people in the outside, including the hotels. So we are deploying a hotel portal so that our service people can also access this information. They can also use the same type of tool not only to animate their local accounts, but also access all the information about our strategic and key accounts.
What are the benefits your corporate clients see by the deployment of this sort of connectivity tool among your sales managers?
For them, it's better service, better connectivity and a better understanding at each country level, and even at each property level, of the strategic value of these accounts. More and more, an account can at some times be very important for Accor globally, but not for every single independent hotel. So we need to make sure that when they get to any of our properties, they can be flagged as an important client and get the right type of service. This is where we can make the difference.
What's your timeframe for involving local properties?
Basically, the tool has been designed, and it's already ready. The test phase is now. We will start rolling it out in November, and the idea is to roll it out between November and June 2015 to 2,000 properties, all the major properties that do corporate contracts.
What do you expect for 2015 in your negotiations with corporate clients?
It looks quite promising. We are still in a market where corporate accounts are trying to save as much as they can. So we are expecting a moderate rate increase for next year in the same way as what we have seen over the past two or three years.
How did that end up in past years?
Close to around 3 percent. It varies depending on the region.
What is your general sense now of business travel demand? Are you seeing consistency worldwide?
We see that corporate accounts want to talk to global players [to address] their needs globally. They want to embrace all their needs into this global account management. It's not only business travel, but also long stays and the meetings and events part, which is getting more and more integrated into global travel policy and the travel programs of the big accounts. It's starting very big here in the United States, and slightly less at Europe, but we know that Europe is going to catch up at some point. In Europe, 10 years ago the meetings side was very small, but now they are getting bigger and bigger, which is good.
How is that meetings market today, in terms of demand?
It's a matter that is very solid. That will fluctuate depending on the economic situation, so we'll see that in periods of crisis companies tend to freeze their expenses. We know that these activities are suffering when there is a downturn, but it is still quite solid, and when the economy goes up then there is always a catchback.
What's Accor's strategy in terms of emerging markets?
If you look at Accor today, except from the United States, where we are very small, we're very big almost everywhere. And we almost have, in other regions, the leadership position. We're number one in Latin America and, of course, in France and Europe. In Australia we're also number one, and in Africa. In that aspect, we are the largest international chain. And when we look at our development plans, physically we're opening a new hotel every other day. So the idea is to open within the next five years 150,000 extra bedrooms. And the development, to answer your question, will take place mainly in Latin America, [Asia/Pacific] and the Middle East.
How about the United States? Is there some more thought to putting more resources there?
Yes. There are quite a few projects now, a few leads that we are receiving. We have also a few Pullman projects and Sofitel projects that are in the pipe. It's a market that's very much more difficult for to penetrate and is already very well-penetrated by our U.S. competitors. But apparently we are seeing some signs of interest. As you know, we have strong development in Latin America. We have 108 hotels, and we have many hotels in the pipe. I think many of the investors that we have there are also expanding to the U.S., and would certainly be trusting our expertise much more than people that have been working with our competitors for many years.
Is dynamic pricing a focus for Accor in terms of corporate agreements, and how has it been received?
Basically it is on our chainwide products and chainwide offers, which are based on dynamic pricing. This is getting bigger and bigger. It's fast-developing, so we use this mainly for our largest accounts, the strategic and key accounts. On top of that, [when] negotiating a corporate contract, we give them a dynamic discount on all the other hotels. We also use these for midmarket, small- and medium-size enterprises, where we propose to them an offer which is based on a dynamic discount on the [best available rate].
At the core of their program, we see companies still want to have a static negotiated rate. They negotiate this static rate as their threshold. They see this as the maximum they are willing to pay. And when they have done that, then when they purchase, they try to get any rate that is cheaper than that. So they use this as a guarantee.
We know there's been some development of some tech companies that cancel and automatically rebook business travel stays. What are Accor's feelings toward that?
Basically, we try to develop strong partnerships with our strategic and key accounts. And we try to provide them the right service and the right price, and to make sure that we understand their needs, and then we try to avoid this type of behavior. Which means that if they do that, the rates we are quoting them on the service is not correct. So if some companies are only on the best-buy approach, then at some point they are not really the type of companies that we will be developing a strong relationship with. But at some point we also have to do our fair share of the business; we need to make sure that our proposition is good enough for them not to go into that route.
In terms of distribution, particularly online distribution, what is Accor's strategy?
Being a very international group for these hotels everywhere in the world, we have a strong multichannel strategy. The idea is that you have to be visible in the marketplace. You have to be visible in every channel. So we want to push, for sure, our direct channels, our Accor website, which is a very strong web platform. But we also operate with all the key global distribution systems in the world, as well as with all the major travel management companies. Concerning OTAs, we do not work with all of them, but we select the ones that are really owning the market, or leading the market globally in the different regions. But we're inclined to open our distribution as much as we can.