How Accor is attempting to ‘premiumise’ the economy segment

In the rapidly evolving hospitality landscape, the premiumisation of the economy hotel segment represents a strategic pivot towards enhancing guest experiences while maintaining affordability. And it seems Accor is increasingly pushing this strategy as Ibis celebrates its 50th year, with Ibis Styles hotels taking a leading position in the company’s planned pipeline. 

Ibis Styles, which serves as Ibis’ “non-standardised”, design-led brand and allows owners to personalise their properties boasts a pipeline of 73 hotels in Europe & North Africa compared with a pipeline of 28 Ibis Budget hotels and 26 standard Ibis hotels.  

“Ibis Styles is miles ahead in terms of pipeline because people want a level of personalisation in their hotels,” Philip Lassman, vice president development UK&I, Benelux and Nordics says, adding, “The design and modernisation of our network is very important to us.” 

A part of this modernisation is the introduction of smart rooms – a change from the traditional accessible room – which comprises showers with electrical washbasins, Japanese blinds and electric beds. 

“We’ve started investing in the full concept, some hotels have already started including this room and we now propose it to most of the owners when doing a new hotel,” says Antoine Bourrissoux, chief, design & technical services Europe & North Africa. 

Innovative ideas around Food & Beverage are also being leveraged to enhance guest experience and increase turnover, with more hotel managers exploring more activations in their hotels in order to inject more personality into the property, notes Florence Liger-Tourres, VP Marketing Economy Brands, Europe & North Africa. 

“We’re looking at bars with the Ibis brands and spaces where you can have gigs in Ibis to increase guest spend at the bar.” 

And it seems this premiumisation of economy isn’t just about aesthetics but also about practicality, with Thiemo Willms touting the benefits of Ibis Styles when it comes to conversions, especially when considering retail to hotel conversions or office to hotel conversions due to the ranging size of spaces in these buildings. 

“Conversion accounts for around 90 per cent of all projects in my region. So then Ibis styles is the ideal brand because it is so flexible; you can have rooms of 16, 18 or 25 square meters.” 

But markets in southern Europe and Northern Europe aren’t the only ones attracting the attention of Accor as it works to upgrade the meaning of “economy”, as Lassman notes that eastern Europe has also caught Accor’s eye. 

“In Eastern Europe and the Mediterranean, Ibis Styles is leading the way in the pipeline, with 18 hotels compared with five standard Ibis hotels. As these new Eastern economies are emerging, there are entrepreneurs wanting to make their mark and put their own stamp on something. Romania is exploding with new hotel developments, and we have 20 hotels and probably 20 more in the pipeline. 

He adds: “And there’s a big push for us in the Mediterranean basin, with eleven Ibis styles hotels in the pipeline.” 

The focus on expanding in markets such as Eastern Europe and the Mediterranean basin signifies Accor’s ambition to grow its footprint by leveraging the premiumisation strategy. This includes tapping into emerging economies and catering to entrepreneurial hotel owners eager to leave their mark on the hospitality industry. 

It seems the ongoing premiumisation of the economy hotel segment is not just about elevating the physical aspects of the hotels but about reimagining the economy hospitality experience, with the goal of increasing turnover in a time of significant margin erosion and aiding expansion into other markets.  

Looking ahead, Lassman says: “We want to drive scale, we want to focus on the resort market with the Mediterranean basin, and we want to focus on high growth Eastern European economies. Germany, the UK and Benelux are really very important markets for Accor. But there’s a big opportunity to penetrate in Eastern Europe, Poland in particular.” 

Liger-Tourres adds “2024 is about experience in our economy brands. Just because we’re economy brands doesn’t mean we’ll only offer value for money. We want to improve the experience as much as possible.”