Millennials are becoming largest consumer group for hotels: Descrozaille

Accor India COO says the firm has 17 new projects in the pipeline with three hotels opening this year

MARC DESCROZAILLE, chief operating officer at Accor India, Middle East & Africa, responsible for 200 hotels across geographies, including India, tells Pavan Lall the country has the potential to add at least 10 more Sofitels, local business is coming back, and the firm has 17 new projects in the pipeline with three hotels opening this year. Accor India runs 53 hotels in India and recently launched its top-tier brand — the Raffles —in Udaipur. Edited Excerpts:
 
How do you see the new world of hospitality in reference to digital transformation?
 
We are still a long way to reach the 2019 numbers, and experts say it will take us until 2024 or 2025. But we see some clients coming back faster than the others. For example, millennials are becoming the largest consumer group from GenX’ers. These are new clients and their requirements and needs are different. So there are two main forces -- the first being digital and the second that people won’t travel like they used to. They may avoid planes, maybe focus much more on local tourism and still expect environmental support and overall sustainability.

 

There is of course also a realisation if we don’t do that we won’t be in business for the future. Hotels are built for 50 or hundred years and it’s a long-term investment. Digitally checking in and checking out are not what people want to wait for and these are administrative processes that will give way to keys sent to phones, as are online payments, and so on. They will also make the process smoother.
 
What’s the status of your management contracts and other expansion in India?
 
We have 53 hotels in India. Note that we have also 53 in Dubai, which is just a small city by comparison and so the question is why so few in a large country like India. We do need to have more but have a great partnership with Interglobe, and the Ibis and Novotel brands have been successful. There are 17 hotels that are on track for development and we just la­un­ched the Raffles in Udaipur in a luxury ni­che. Another will come up in Jaipur. We are also launching one Novotel in Chandigarh in a few weeks and an Ibis in Mumbai in Vikhroli this year. It’s about 6 per cent expansion. Of course again for the size of India we should have 10 more Sofitels in India against one, in Mumbai.

 
When will business travel return?
 
The domestic traveller is moving again both for leisure and for business but the international traveller is taking longer. In foreign countries one has to con­tend with corporate policies and the challenges of quarantine and being stuck longer than wants to. We estimate that maybe 10 per cent or 15 per cent of business travel will not be coming back. However, the gaps between personal and office are getting blur­red —  and people are going with families to places where they are also doing what we call ‘bleisure trips’ — a combination of business and leisure.

 
How long will it take for rates in India to recover?
 
The impact on business was severe and we had to reduce rates or then close hotels for certain periods. But many have realised that dropping rates won’t get you additional clients. Rates have to be taken to a point where it’s at least sustainable and, if not, will have to shut for good. Diluting rates won’t get you more clients as there is an expectation of excellence and for us the opening of Raffles Udaipur was a real positive perspective on it.
 
Where do you see India’s potential for pockets of tourism?

 
India can do much more in terms of unlocking infrastructure to make it international standard and cater to its domestic markets. To unlock the future potential of leisure development is linked to policy. Politically it has to be supported because job creation linked to it is phenomenal. Because of Covid, maybe, there has been a realisation that leisure travel can be a large part of what is Indian leisure and tourism. We are having a lot of discussion on luxury properties and resorts that we wouldn’t have had in the last two or three years before the pandemic.