It’s all about experience these days and the key experience at any event featuring an Accor executive is that they deny the massive deal everyone is expecting. Absolutely, no way, that’s not the plan, what, who, us?
So are they splitting the company so they can flog half of it off? Good grief, no. It’s all about efficiencies. Midscale and economy is more of a geographic play, whereas lifestyle and luxury is more focused on the brand. So back we go to practising our surprised faces.
But, as we learned at the Skift Future of Lodging event, it’s all about the experience economy 2.0. All experiences are not the same. So this meant we had a more extended experience, with a couple of denials from Accor CFO Jean-Jacques Morin, with a nope, no acquisitions through the spac, the deadline on which approaches. To be fair, the markets do frown on CFO’s accouncing deals on stage at conferences and not in the appropriate fashion.
While the experience of an Accor denial is always important to us, Skift’s senior research analyst Varsha Arora pointed out that the world of experience is moving on. Some experiences will be more important than others. She told the assembled that the experience economy 2.0 would favour hybrid hospitality, luxury travel & wellness, sustainability, hyper personalisation and use of AI.
Leading the march on all this, as it is across the sector, is luxury. And as Morin noted on the launch of the group’s Orient Express yacht, having a luxury yacht is a sign you like ESG (sails, innit).
All of the four experiences in the experience economy 2.0 have to be part of the luxury offering. Arora noted that luxury and wellness shared “the same pool. A domestic wellness tourist will pay 178% more than an average domestic tourist” (53% for international tourists).
Katerina Giannouka, Jumeirah’s new CEO, told the conference: “In the luxury space you have to do hyper personalisation. Some people want no technology, other people want everything technology. We’re strong on using data to enable us to hyperpersonalise. Luxury is about what can I have that I can’t buy.”
Aside from the matter of the bill at the end of a Jumeirah stay, which suggests that, in fact, you are buying it, Giannouka has all the points.
Experience and cash are bedfellows. When asked when Accor was going to put a revenue target on its augmented hospitality strategy, Morin said that the 100 hotels leading the way were “different animals. They make three, four times more fees than other hotels. Fifty per cent of turnover is F&B and rich M&B that makes good money. It’s not so long ago that lifestyle wasn’t even a segment. Customers go to you because they know they’re going to get something different.”
It wasn’t just F&B. Arora reported that when hotels provided office space, areas to meet, turnover could be increased by up to 20%. She asked: “Are you using your space well? Can you boost growth?”
Morin added: “The share of wallet is much more geared towards experiences and spending time in hotels. It won’t come back to how it was before. People value things differently after covid. The experiential transformation of the business has become real.”
The other experience we’ll all be having at events over the next year at least, but had for the first time at Skift was the wonderful world of ChatGPT. It is, said Arora, “bound to change the way that people will search”. Potential included: improved guest experience and personalisation, automated guest communication and engagement. a new way of planning and increased efficiencies.”
Companies offering advanced personalised offerings can see a 40% revenue uplift, but the biggest personalisation challenge, Arora said, the volume of data “getting the data right is very important”.
And not cheap. Morin commented on the split* between hotel uses. Some hotels will always just be beds, some are hotbeds of experience. Both need to consume the technology on offer because of the efficiencies available. The experience in economy will be shock at seeing a human team member, the experience in luxury will be that team member experiencing no more grinding admin.
As ever, with the sector’s eyes lighting up at ChatGPT, you can’t automate what you don’t understand. AI is not a way to avoid not knowing the basics of a stay before you layer on sky diving with koalas. But it is inspiring the sector and giving many in it hope that they can use the gallons of data waterboarding them at the moment. And that’s enough.
*not that split. Stop it. That’s not happening.