Hoteliers should focus on ultra-local business if they are to make up the shortfalls in international travel caused by the Covid-19 pandemic.
Speaking at the International Hospitality Investment Forum (IHIF) in Berlin, Accor CEO Sébastien Bazin predicted that the international travel market will be the slowest to return in the wake of the global slowdown.
He argued that this is because the international corporate market is most likely going to have to adapt to new ways of working in the pandemic, for instance replacing face-to-face meetings with on-line conferencing instead.
Bazin said: “I really believe that we stand to lose about 20% or 25% of that entire [international] market.”
However, he added with more people than ever working from home, hotels should reconfigure themselves to provide anything from work space to meeting rooms in order to offer a new way of doing business for anyone keen to get out of the house.
Bazin said: “That’s a far greater [amount of] business than we stand to lose from the international travel market.”
A significant proportion of Accor’s business is driven by domestic business travellers who are more likely to resume old practices as domestic travel remains considerably cheaper, while the SMEs that drive it have staff who are keen to meet face to face to establish proper relationships.
Meanwhile, around 40% of the group’s business comes from leisure travellers, who Bazin believes will begin to travel again as soon as they are permitted to.
“My 40% leisure segment will increase dramatically and we have seen it over the summer,” he said. “There was robust demand from the domestic leisure business – we expected it but it was far better than we expected.”
Reflecting on the pandemic itself, Bazin added the decision he was most pleased about was to set up a $200 million hardship fund which could be accessed by hotel employees actually in resort.
He said this was important as once he had instructed all the hotels to close on 1 April, 2020, he was very concerned that staff in countries in regions like South East Asia, South America and Africa would suffer as they would not all be lucky enough to access government support schemes.
Instead, the fund was available to up to 290,000 members of staff in resort, many of whom took advantage of the scheme with the average grant costing $400.
Bazin said for this reason as well, when the group was able to make $200 million in savings to survive the pandemic, the majority of job losses were in the back offices as opposed to the hotels where staff were better equipped to find new roles.
He added: “They have a 90% chance of finding a new job, while I know that’s not the case for my employees hotel side.”