Accor leans into luxury and North American expansion
A Paris-based hotel giant is setting itself up for a luxury takeover in North America.
Accor, the owner of 40 hotel brands that range from the affordable Ibis all the way up to the ultraluxurious Raffles, isn’t as well-known a commodity as the likes of Hilton and Marriott International in the U.S. However, that might quickly change on the high-end front in the coming years.
Accor’s best-known brands in the U.S. currently center on Fairmont and Sofitel, as well as many under the company’s Ennismore collection of lifestyle hotels, including brands like The Hoxton and Mondrian.
Company leaders have made overtures for years about how they’d like the company to have a bigger footprint in the U.S., but now it appears there are several tangible signs Accor means business.
For starters, Accor’s headquarters for Raffles, as well as the Orient Express brand, is moving from Paris to New York City, several company leaders told TPG during the International Luxury Travel Market, or ILTM, conference in Cannes, France, last week.
“That just goes to show how serious we are about growing the brands in the U.S.,” Jeannette Ho, vice president of Raffles brand and strategic relationships, said in an interview with TPG.
Raffles positioned for a US takeover
The company’s first North American Raffles hotel and condo project is on track to open next year in Boston. While Ho didn’t specify what cities might be next on the list, a developer with the Boston project indicated earlier this year the company was scouting sites in New York, Los Angeles, San Francisco and Chicago.
It may seem like a tall task to grow an ultraluxury hotel portfolio in the U.S. when Marriott, Hilton and Hyatt already have such strong brand identities here. Don’t rule it out, though.
The Boston Raffles developers indicate they were inclined to go with Raffles over a bigger brand because there’s more autonomy to build the hotels as unique, stand-alone properties compared to something with a bit more standardization and brand standard rigidity like a Waldorf Astoria or St. Regis.
If those actually building and investing in hotels are sold on a lesser-known brand like Raffles, it’s only rational to think the guests will assimilate similarly. One way the brand can court guests is with its significant attention to food and beverage offerings.
While the original Raffles in Singapore has 116 suites, the hotel has 10 bars and restaurants. The 147-room Raffles Boston Back Bay Hotel & Residences will feature six food and beverage outlets.
“Most of our owners are not really institution[al investors]. A lot of them are actually incredibly influential families in each of these destinations,” Ho said. “As you can imagine, the Raffles is a reflection of who they are and their values.”
Also, while Orient Express is included in the office move to New York City, travelers shouldn’t take that as a sign Accor is bringing ultraluxurious trains to the U.S. While Accor has plans for luxe trains in Europe, the company also uses the Orient Express label on hotels. None have been officially announced for the U.S. so far.
Sofitel and soft brands
Accor’s growth isn’t just fixated on Raffles and Orient Express.
Maud Bailly, Accor’s CEO of southern Europe, will also become the CEO of Sofitel and Accor’s MGallery and Emblems Collection soft brands early next year. Sofitel and MGallery have a presence in the U.S., but it’s much larger for both abroad. The Emblems Collection is expected to launch in China. Bailly doesn’t plan on ignoring the U.S., however.
“If I did that, I would be fired,” she said with a laugh during an interview with TPG. “The awareness of Sofitel is super powerful in the U.S., but we can do much better.”
Renovations are planned for the Sofitel in New York City (along with the brand's properties in other locations like Amsterdam and Athens). Elsewhere in North America, Accor is expanding with plans for an early 2023 opening of the Hotel Ändra Seattle - MGallery in the Pacific Northwest of the U.S. and Sofitel Legend Casco Viejo Panama, in the historic district of Panama City, Panama.
The moves come as Accor significantly ramps up its focus on so-called lifestyle hotels, properties that usually make about half their revenue from food and beverage outlets in the hotel. The Ennismore division continues to see notable growth in the U.S. with brands like The Hoxton and Morgans Originals.
Similar to the Raffles strategy, Accor’s future success with Sofitel may hinge on appealing to hotel owners and investors first and then wooing guests. If they play their cards right, you'll eventually be able to check into a Sofitel beyond just the brand's current footprint of five U.S. cities: Chicago, Los Angeles, New York City, Philadelphia and Washington, D.C.
“We are currently speaking with many investors [and] many owners to see in the post-COVID era what we can do to open flagships in key destinations,” Bailly added. “It’s a pity to have so few Sofitels in the U.S. But what I’m sure of is that we love America, and America loves France.”