Fringe festival

Week two of results season and if you were playing a drinking game which featured ‘pipeline’, ‘NUG’ or ‘positive momentum in conversions’, then good luck to you and we hope you have plenty of fish fingers handy.

And it was no less festive at Hilton and Accor, where, at the former, president & CEO Chris Nassetta was all hopped up on cost-effective conversion brand Spark by Hilton, extended stay flag H3 by Hilton and a potential luxury lifestyle launch. 

Project H3 has 350 deals in negotiation, while Spark has more than 400. The luxury lifestyle flag was expected to extend a lovely lovely halo.

At Accor, there was similar bonhomie, with both raised revpar and Ebitda guidance for the year, a refinancing and a €400m share buyback. Chairman & CEO Sébastien Bazin failed to announce when recent hire Gilda Perez-Alvarado was going to flog off either the budget or luxury segments, but Q3 results are not where you go looking for meat.

What you do find are frissons on the edges and both announcements came with interesting undercurrents. At Accor, the group was lightly overshadowed by rumours that AccorInvest, in which Accor has a 30% stake, was hoping to raise €2bn with an asset sale. Would some of these assets be sold unencumbered by Accor brands? Could be. Accor has been hoping to sell its remaining holding in the property group for a while, but has a five-year lock on such activities until 2023. Which is now. 

So while we wait for AccorInvest to put its house in order, it’s unlikely that Accor will be making any big exciting moves, although this is Accor and only a fool would bet against drama on that front. 

Where the other frisson came from was the acquisition of the full chunk of Potel & Chabot, the caterer and events business, which it has used to improve MICE and offer fancy things like trips to Roland Garros for loyalty members. 

At Hilton, Nassetta told analysts about expanding the group’s “events-booking capabilities, enabling customers to book meetings and event spaces with or without guestroom blocks directly on our website”. He had also announced “an expanded agreement with Tesla to install up to 20,000 universal wall connectors at 2,000 hotels making our planned EV charging network, the largest in the industry”. 

What makes both of these titbits interesting is that, in a season of NUGs and rooms, rooms, rooms, both Hilton and Accor were pointing to non-room areas. This is not unusual for Accor and has been part of its augmented hospitality project for some time.

But both Hilton and Accor are focused on asset-light growth. And when you’re fee-based and looking at franchises, that could easily mean not really caring that much about what else happens on the property. More events? Higher ancillary spend? Not really their problem? 

It could easily not be and there are plenty of distribution-only light-touch flags where no damns are given. Fortunately for the event-attending guest and the hard-pressed owner, lively competition and loyalty programmes are keeping the big brand stables honest. They can’t stay at arm’s length, they have to think of something other than the NUG. 

So when the fog clears and you make your comparison, should you be studying the pipeline? Or who can attract an extra guest with an EV charger? 

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