Pamela Whitby caught up with a senior revenue manager at AccorHotels who reveals why getting into luxury is a no-brainer
Adam Hayashi, VP of Revenue Management & Analytics at AccorHotels, knows about luxury. His career began at the front desk of Toronto’s iconic Fairmont Royal York in the 1990s, where he also met his wife – hence the old railway print of the grand hotel hanging in his living room!
Hayashi, who will be speaking at EyeforTravel North America, soon moved into revenue management. His career path took in IHG, Delta Hotels, Hilton and Westmont Hospitality Group before returning to where it all began, becoming regional director of revenue management at Fairmont Raffles Hotels International (FRHI) in 2012.
In July 2016 AccorHotels completed the acquisition of FHRI – worth a reported $2.9-billion – and a few months later Hayashi stepped into his current role.
With responsibility for the North and Central American markets, Hayashi has a very clear objective – to use the FHRI deal to lead AccorHotels’ charge into the luxury segment in North and Central America.
The stated aim of AccorHotels’ CEO Sébastien Bazin is to become the number one player in luxury globally, and it is not difficult to see why. According to a global luxury hotel report from Dublin-based Research & Markets, the luxury market was valued at $15.5 billion in 2015 and is projected to reach $20.4 billion by 2022.
The luxury market was valued at $15.5 billion in 2015 and is projected to reach $20.4 billion by 2022
Source: Research & Markets, Dublin
“We’re in an upward cycle and luxury is doing very well,” says Hayashi, who will share more luxury insights in Las Vegas.
North Americans today have greater spending power, airfares are cheaper than ever before and there are numerous distribution channels offering a wide range of luxury products – all helping to make this segment more affordable to a wider audience. The result is that AccorHotels has witnessed record growth for the past seven years, occupancy levels are rising, and so is its market share.
Shift in strategy
While Hayashi acknowledges that a correction is always a possibility, luxury remains a crucial part of its growth strategy. “Until the FRHI acquisition, North and Central America accounted for less than 1% of the global revenue. Adding 40+ luxury hotels has boosted that number to almost 15%” he says.
At the time of publication Accor has, give-or-take, 4300 hotels globally. Of these, just 210 are luxury hotels that fall under the Fairmont, Raffles and Sofitel umbrella, and yet they contribute over 40% of the global business volumes.
“For every one luxury hotel, we get the same fees generated for roughly 17 economy hotels,” Hayashi explains.
Going forward, the group’s luxury portfolio is expected to account for some 50% of the business volume by 2021, with over a third of the revenues from properties in North and Central America
Going forward, the group’s luxury portfolio is expected to account for some 50% of the business volume by 2021, with over a third of the revenues from properties in North and Central America. This places it in second place in the luxury space behind Marriott, and just ahead IHG.
AccorHotels continues to grow its luxury and upper upscale footprint with acquisitions and development. With numerous big box hotels in attractive cities, Fairmont and Sofitel are also perfectly positioned for growth in the luxury group and meetings sector, where there is huge potential to drive ancillary revenue.
Next week, Hayashi shares lessons in RM from the field.
Want to hear more from Adam Hayashi, VP of Revenue Management & Analytics at AccorHotels, join us in Las Vegas on October 18-19 this year
October 2018, Las Vegas