Christophe Chamboncel, Accor: Romania has unlimited prospects for growing the hospitality industry
French group Accor, one of the biggest hotel operators in the world, plans to continue its accelerated expansion in Romania despite the COVID-19 pandemic, which has negatively impacted the hospitality industry. In an interview with Romania-Insider.com, Christophe Chamboncel, Accor Vice-President Operations Management of Accor South-Eastern Europe, details how the pandemic has impacted the group's local operations and the development plans in Romania.
Accor plans to reach 50 hotels in Romania by 2025 with seven new openings only in the second half of this year, three of which have already taken place (ibis Styles Bucharest City Center, ibis Styles Galati Centrum, and Mercure Timisoara).
"For the next 2-3 years, Accor has secured a strong pipeline in Romania with further ten properties totaling more than 1,300 rooms. Swissotel Bucharest - the flagship five-star hotel development in the capital – is one of the new arrivals, and I am excited to say that new brands are about to enter the Romanian market," said Christophe Chamboncel.
"Romania remains a 'hidden treasure' of Europe, as it has unlimited prospects for growing the hospitality industry, both in the medium and long term. Despite the pandemic, the prospects remain promising, as Romania is one of the few countries in Eastern Europe that, apart from international tourists, also has a great potential for the development of domestic tourism. So our plans are moving forward even stronger as this period is creating new opportunities," he added.
As for the crisis generated by the COVID-19 pandemic, Chamboncel believes the worst has passed and expects a gradual recovery. "Rather an optimistic person, I want to strongly believe that 2021 should see some positive rebound signs with major shifts of events planned in 2020 (for example Euro2020, ½ Marathon…) and planned events in 2021 such as Enescu Festival or EURO U19," he told Romania-Insider.com.
Read the full interview below to see what new hotels Accor will open this year, how the group has adapted its local operations to the current sanitary context, and what opportunities arise from the current crisis.
Q: A recent study shows that the revenue per available room (RevPAR) in Romania dropped by 66% to EUR 17 per day in H1 2020. How has the COVID-19 pandemic affected your business in Romania? How have the occupancy rate and revenues per room evolved for Accor-managed hotels in Romania?
It goes without saying these are extraordinary & unprecedented times, that have a massive impact on our business.
While the numbers in the hospitality industry in general and in Accor, in particular, may have significantly dropped in the first half of 2020, we believe that it is more relevant to look at what we did to overcome the difficulties faced by hotels and to support recovery.
When the whole market is dropping massively, the only true indicator of our performance is how our properties perform compared to the competition within the market. Therefore, we focus mostly on our hotels losing the least in this situation.
Looking at June and July, when the majority of the hotel supply was opened again, our properties managed to reach a 9% higher RevPAR than their competition. We managed to achieve this by losing less in both occupancy rate and room rate.
Of course, the pandemic affected the business heavily and changed the way we work with the focus switching especially to domestic travel. Moreover, we see a better performance in our hotels positioned in leisure destinations rather than in big cities.
Q: Were any of your hotels closed during the state of emergency? What is the situation now, are all your local hotels open?
This comes naturally to us: Accor has been prioritizing the safety and wellbeing of its customers and employees on a daily basis for more than 50 years. During the lockdown, most of our local hotels were closed. We chose this measure in order to protect our staff and our potential visitors from a danger we were not yet able to fully understand and mitigate. More so, by shutting down the hotels, our owners also obtained significant cost savings on the operational side, thus preserving financial resources for the recovery.
The reopening process started in mid-May, right after the emergency state was lifted. By the end of June, 90% of our local network was open and I am happy to say that we are now operating at full capacity.
At the end of June, we took another bold move: the first hotel opening during the pandemics – the brand-new ibis Styles Bucharest City Center – a central hotel on Știrbei avenue that is already performing above average. By keeping up with our development calendar and opening 7 new hotels this year, Accor sends a strong positive message to the hospitality market. Tourism will recover, as it always did, and will come out of this crisis stronger than ever. Thus, the markets that showed potential before will maintain their attractiveness, both for investors as for travelers.
Q: What safety measures have you taken to protect your visitors and employees?
Welcoming and taking care of people is at the heart of everything that we do, as a company. When this crisis challenged the core of our mission, we reacted promptly and decisively. We introduced new safety and hygiene standards, we joined hands with the best in medical assistance and we reconsidered our booking and cancellation policies, to offer our guests the most flexible travel conditions.
To revamp our cleanliness and prevention standards, Accor, a global leader in augmented hospitality, and Bureau Veritas, a world-leading provider in testing, inspection and certification, developed the ALLSAFE Label, to certify that the appropriate safety standards and cleaning protocols have been achieved to allow businesses to reopen and operate in the new context of the pandemics. I am happy to announce that all Accor hotels in Romania have been certified with the label by the end of July. Therefore, I am confident to say that we are in the best position to offer our guests a safe and comfortable stay and secure access to our services.
The ALLSAFE label represents our new cleanliness and prevention standards and provides assurance that these standards have been met in our hotels. Specific health and safety measures are wide-ranging so our guests can be reassured we offer them a safe environment. We reinforced the cleaning program in public areas, with frequent disinfection of all high touch areas, contactless check-in, check-out and payments carried out whenever possible. Social distancing is enforced in all common areas, and our employees have been given comprehensive safety and hygiene training.
Accor guests also enjoy access to the highest level of care. As part of the ALLSAFE label, Accor is partnering with AXA, a global leader in insurance, to provide medical support to guests across its network. Accor’s guests benefit from the highest level of care thanks to the expert medical solutions in telemedicine through free access to medical teleconsultations and will also get access to AXA’s extensive medical networks with tens of thousands of vetted medical professionals. This means that the Accor teams on the ground are be able to assist guests and ensure their safety during their stays.
Q: Have you done any layoffs or prepare such measures in the near term?
Our measures to reduce costs have been extensive and profound. Looking back at the past months, we are happy to say that their results are now in place and the savings we achieved allowed us to preserve our teams and focus on the recovery process.
More so, Accor Group has taken proactive measures to protect its activity and support its employees and partners, including the creation of the “ALL Heartist Fund” – a Covid-19 special purpose fund. On April 2nd, 2020, Accor announced its decision to allocate 25% of its €280m planned dividend to the creation of the ALL Heartist Fund, a €70m-fund devoted to help Group employees and individual partners affected by the Covid-19 crisis. The purpose of the fund is to provide financial assistance for financial distress due to an impactful income reduction resulting from the current Covid-19 unemployment, including nutritional, health, safety, housing, educational and/or funeral basic expenses.
Q: The Romanian Government announced several measures to support operators in the hospitality industry. Have you received any such support yet? What else would you expect from the authorities in this regard?
The help received from the state in the form of technical unemployment was very valuable, because it allowed us to save costs and keep our teams together. What could help the hospitality business is predictability of restrictions and regulations.
Q: How is the situation in Romania compared to the other countries in the region that you oversee?
Romania has a large domestic tourism market and a balanced distribution between business and leisure travelers. These two features place the country in a good position for recovery, along with Central European market.
Still, there are challenges to overcome, such as the evolution of the pandemics and people’s enhanced concern for their safety and the one of their dear ones. That’s why we rely greatly on the intense cleanliness and safety measures we implemented in all Accor hotels, to reinforce peoples’ trust that travelling and getting together can be done in optimal conditions, with care and responsibility.
Q: What is your base scenario for the evolution of your operations in Romania for this year and for next year? What’s the worst situation that you prepare for?
The peak of the crisis is undoubtedly behind us, but the recovery will be gradual. Having taken these emergency steps and recovery plan towards our partners, we need to become even simpler, more agile and even closer to the field. Rather an optimistic person, I want to strongly believe that 2021 should see some positive signs of rebound with major shifts of events planned in 2020 (example Euro2020, ½ Marathon…) and planned events in 2021 such as Enescu Festival or EURO U19.
Q: In May last year, Accor was preparing to open another 10 hotels in Romania by 2022. At that moment, the company managed 11 hotels in the country. How many hotels have you opened in the last year? Has the pandemic affected your development plans? Were any new openings delayed due to the crisis? Do you maintain the target announced last year?
The development of Accor network in Romania is extremely dynamic and the proof is the ambitions pipeline and openings we have planned. To show the scale of our ambitious plan, the goal is to reach 50 hotels in Romania by 2025.
This year, we opened in June the first hotel during the pandemic: ibis Styles Bucharest City Center and the second one on August 24, ibis Styles Galati Centrum which features the first Wise Café in Romania. Another five openings are to follow by the end of the year: Mercure Timisoara, ibis Timisoara, ibis Politehnica, ibis Styles Bucharest Airport and Mercure Galati. That is 7 new hotels in just one year. For the next 2-3 years, Accor has secured a strong pipeline in Romania with further 10 properties totaling more than 1,300 rooms. Swissotel Bucharest - the flagship five-star hotel development in the capital – is one of the new arrivals and I am excited to say that new brands are about to enter the Romanian market.
Romania remains a "hidden treasure" of Europe, as it has unlimited prospects for growing the hospitality industry, both in the medium and long term. Despite the pandemic, the prospects remain promising, as Romania is one of the few countries in Eastern Europe that, apart from international tourists, also has a great potential for the development of domestic tourism, so our plans are moving forward even stronger as this period is creating new opportunities.
Q: Are there any opportunities that you see arising from this crisis?
We continue to learn from any crisis, and this is bringing opportunities as other storms in the past.
More and more investors and owners are trusting Accor for joint investments in the hospitality industry, fact which is supported by the current Partners who choose to open more hotels with us but also by new Partners who believe in our expertise demonstrated by experience of more than 23 for years in Romania. Accor is an international company with European roots that comes with a strong portfolio of brands, expertise and distribution network, which benefits both customers and owners and this opens up many opportunities for us and our Partners.
We are a great partner for hotel operators in Romania and across Europe, as we have the best conversion brands such as Mercure, Greet or ibis Styles. We see investors showing more interest than ever to find solutions for their properties and our highly flexible brands represent an effective way to join the Accor network, with minimum CAPEX expenditure.
Q: How do you see the trends in the tourism sector changing in the COVID and post-COVID period?
Every dramatic change in the market is the root of new trends and the events in the past months are no exception. The first major shift that we noticed was the travelers’ preference for domestic tourism. That is actually a very sustainable and beneficial trend. By traveling closer to home, people have the chance to discover the beauties of their own country, to reconnect with family and friends.
We have already noticed tourists’ preference for international chain hotels, which reflected in higher occupancy after the reopening. Guests choose international brands because they are more confident in their ability to implement and respect rigorous safety and cleaning protocols, without compromising on guest experience.
The increased focus on safety and hygiene is a trend resulted from the Covid-19 crisis, but it is here to stay. I have strong reasons to believe that people will be far more aware about the cleanliness and safety standards of the destinations they choose, far after the crisis will have passed.
Christophe Chamboncel is Accor’s Vice-President Operations Management - South Eastern Europe and leads operational support to Accor hotels in the SEE region. He joined Accor in 2002 and has developed his hotelier career along with Accor in France (Paris), Africa and in Eastern Europe - including Romania and Poland. After being responsible for the roll out of an Accor key digital project across the region, Christophe’s mission in Romania and in the SEE is be to drive hotel operations in key areas of service, engagement, revenue, GOP (Gross Operating Profit) margins and relations with Accor business partners. He has been based in Bucharest since June 2019. He also worked in Bucharest in 2014-2015, as General Manager of Novotel Bucharest City Center.
(Photo source: courtesy of the company)