In this week’s LATTE one-on-one interview, we speak exclusively with the CEO of AccorHotels Asia-Pacific, Michael Issenberg.
Issenberg’s full-time hospitality career spans more than three decades and began in 1981 at the Westin St Francis Hotel in San Francisco. He has held senior positions across hotel management and property investment including Director of Development for Merlin Properties and was the CEO of Mirvac Hotels, a brand which joined the AccorHotels portfolio in late 2011.
He joined AccorHotels in 1994, and next year will celebrate 25 years with the French hotel juggernaut. Issenberg has been on the Group’s Executive Committee as CEO Asia-Pacific since 2008.
Congratulations on your recent milestone, 1,000th hotel, with the opening of Pullman Tokyo Tamachi. What do you think makes the Pullman brand one of the most successful in the AccorHotels network?
The Pullman brand was launched in Bangkok 10 years ago because we were looking for a brand that could sit in the growing upscale segment and provide affordable luxury for the increasing number of business travellers seeking high-end accommodation without breaking corporate budgets – or leisure travellers who want the best in life without necessarily looking for high-end luxury.
Since then, the brand has evolved and has definitely struck a chord with travellers in Asia-Pacific, in particular, as a vibrant, modern brand that provides hyper-connectivity, sociable meeting spaces, great dining, holistic wellness programs and fresh design-led interiors.
Based on our observations, Pullman Tokyo Tamachi is bordering on the luxury end of the segment. Is this design expected to be replicated in future new-build Pullman properties? And why is Pullman so important to your APAC portfolio, representing more than 60% of the global Pullman network?
Pullman Tokyo Tamachi is firmly placed at the high end of the premium market and is a good example of where the brand is going, but we certainly don’t position Pullman as a luxury brand. Asia-Pacific has really driven the success of the Pullman brand because there is a huge market for a premium hotel that features great technology, social spaces and increasingly design-led interiors for a vast and growing Asian middle-class. We have a network of 75 Pullman hotels in Asia-Pacific, with China being our biggest market, and a strong pipeline that will see us reach 100 Pullman hotels in APAC in the next few years. It is one of the most dynamic and fastest-growing brands, so we are excited about what the future holds for Pullman.
This addition in the upscale market and the recent opening of SO/Auckland in the luxury space suggests a strategic expansion for Accor targeting the high-end traveller. Is the luxury sector the biggest growth area for Accor and, if so, what is fuelling this?
We have long been considered an economy and midscale player, but in fact, Accor is now the second largest operator of luxury hotels in the world and we are proud to say that we have over 720 luxury and premium hotels globally. In Asia-Pacific, we have over 300 hotels and resorts in the luxury/premium segment, which represents 40% of our APAC network, so especially in this part of the world, we are strongly luxe-focused. It similar for the Middle East and North America. We are increasingly focused on growing in the luxury and lifestyle sectors, with a luxe/premium pipeline of almost 200 more hotels by 2021. In terms of room numbers, we have 32.5% of our pipeline in luxury/premium, 35% in midscale and 32.5% of our pipeline in economy, so we are very evenly balanced at the moment. However, we are looking to accelerate luxury growth in coming years. With 24 brands across the luxury/premium sector, we now can offer our owners greater choice in this segment than ever before.
The FHRI acquisition three years ago saw you add Fairmont, Raffles and Swissotel brands to the network. What is your vision for these brands? Is there potential for them to be developed in the Australian market and could there be expansion for the Swissotel brands into Melbourne or Brisbane?
The brands we have acquired we invested in because they are well-recognised and respected brands with strong growth potential. We are not looking to reduce the number of brands we have or to combine brands at this stage, and certainly we are looking to expand the FRS brands in the Australian market and indeed globally.
More recently Accor acquired Mantra, adding 138 hotels across several brands. Will there be a consolidation of any Mantra brands into the legacy brands of Accor or vice versa?
At the moment, we have no plans to phase out of any brands in the Mantra portfolio nor to bring any existing Accor brands into the Mantra fold. We are more focused on ensuring we can clearly differentiate each of the brands in our network so that our guests, partners, owners and staff know what each brand stands for and what brand markers to expect. With Mantra, the next big step for us will be to integrate its brands into our loyalty program.
Accor also just purchased Mövenpick Hotels and Resorts this year. Would this brand suit the Australian market or have you reached the point where you have adequate segment coverage in Australia and don’t need another brand?
I believe the Mövenpick brand would have strong appeal in the Australian market. We still believe there is room for more brands in the Australian market but, ultimately, it will be for our owners and partners to decide which brand they want. The more brands we have, the more likely we can win any hotel pitch, because we can find the right brand for more hotel projects.
Will the 50% stake in SBE provide you with the ability to introduce other legacy brands into the US (Sofitel and Pullman for example), or is this more about giving SBE the foot-up to expand Delano, Mondrian and SLS brands?
The SBE acquisition is a very exciting one for us because it will provide the opportunity to not only expand our footprint in North America, but also to access to some of the hottest and most successful lifestyle brands in the world. In the first instance, we can see great opportunities to introduce the entertainment and food brands of SBE into our existing hotels but we are also looking for opportunities to develop new brands under the Delano, Mondrian and SLS brands, all of which are really strong, innovative and forward-thinking brands.
Your home rental business, OneFineStay, has a relatively low count in Australia with just 36 locations, primarily around Sydney and Noosa. Can we expect expansion into new markets here soon?
At the moment, we are more concentrated on our hotel business in Australia, especially with integrating the Mantra brands fully into platforms and systems. OneFineStay is still relatively new to our business so expansion in Australia will probably happen more organically than being a priority for now.
It’s been a few months since you announced your latest acquisition. Can we expect any more announcements soon?
We are always looking for new opportunities and when the right acquisition comes along, we are lucky to be in a position where we have money to spend. For the past two years, we have been in a major acquisition phase, and while I don’t think you will see anything as big as the Mantra deal coming along in the immediate future, we will continue to explore opportunities that can continue our transformation journey. As you have seen, this is not just about us expanding with new hotel brands but with other travel verticals, digital disruptors and B2B businesses to create an ecosystem where we can interact with our guests on an almost daily basis, rather than just when they stay with us.
AccorHotels recently inked a deal with Eurostar. Can you tell us more about the strategy behind this partnership? And do you have an augmented hospitality strategy for APAC?
The Eurostar deal seems like an obvious one when you think about the fact that Accor is the largest hotel group in Europe and has a large and growing network in the UK. This is another example of us expanding the offers and benefits for members of Le Club AccorHotels, as they can now earn and burn points when travelling on Eurostar or use Eurostar loyalty points to stay with Accor. We definitely have an augmented hospitality strategy for APAC but in our region, there is no Eurostar, so our focus in Asia-Pacific is more on our complementary businesses such as AccorPlus, Accor Vacation Club and the recently acquired ResDiary. We are always open to new partnerships and opportunities to provide new rewards and experiences to our members.
Accor is heavily committed to the travel trade in Australia and abroad, hosting its annual World of Accor function. Why are travel agents so important to you?
Travel agents still account for around 10% of our business in Asia-Pacific and travel agents remain our trusted partners over many years. In an increasingly digital world, there are still some guests who prefer to deal with travel advisors who can provide them with individual advice and specially created itineraries and we remain committed to our relationship with these travel agents. In addition, we believe that a strong travel industry supports a strong AccorHotels, so anything we can do to promote tourism with our valued partners is a win for all.
And LATTE’s signature question: are you able to share your most memorable coffee experience? Where is your favourite coffee shop and what is your go-to order?
I do enjoy my coffee and my go-to is a slim flat white. My Australian wife is an absolute aficionado and struggles to find a great flat white in Asia, which she says is because of the milk. To my great delight, I was tasting coffee at the newly opened Stamford Brassiere at the Swissôtel Singapore and it was sensational. When I inquired as to the secret, they told me the focus on the coffee blends was to ensure the coffee complemented the milk, as milk-based coffees are now their most popular.