Since joining AccorHotels in 2007, he has occupied strategic positions in the business, including becoming the senior vice president in New Zealand, Pacific Island and Japan, and more recently Chief Operating Officer in Malaysia, Indonesia and Singapore. His ability to maintain strong relations with owners and key tourism partners has made him one of the most revered leaders in the industry with an excellent 30-year reputation to boot. Garth Simmons talks about his tricks of the trade and opinions about the hospitality world in these three Southeast Asian countries, where AccorHotels has developed more than 130 hotels despite the tight competition.
As the largest international hotel operator in Asia Pacific and Indonesia, how does AccorHotels observe hotel developments trends in Indonesia, Malaysia and Singapore?
Each country has its own trend in hotel development. In Indonesia, the tourism sector continues to expand due to the significant support from the government with the President’s vision to target 20 million foreign visitors by 2019. The market sees the constant increase and development opportunities together with the improvement of infrastructure planned and taking place. International branded hotels have entered the market, especially in mature market in Bali and Jakarta.
Room supply growth in Malaysia showed an increase underpinned by international hotel brands in Kuala Lumpur and Malaysia due to the demand for high-end residential and mixed-use properties. While Singapore, benefiting from its position as global and regional transit hub, has a well-developed tourism market. The country shows a steady growth of hotel room supply despite the declining numbers of tourist arrivals and demand.
The level of competitiveness in hotel market has been growing globally. Is this also happening in these three regions? And how does AccorHotels anticipate this?
AccorHotels has the largest brand portfolio in the industry, ranging from luxury to economy, and we are the market leader in Europe, Asia Pacific, Latin America, Africa and Middle East.
The group enjoys strong leading presence in Indonesia. As a global response to digital challenges, AccorHotels launched the digital transformation that enhances the power of AccorHotels website for seamless digital experience journey before, during, and after staying with AccorHotels. The project also positioned AccorHotels as the market leader in the digital hospitality business despite of the ongoing fierce business disruption within the industry.
For Indonesia, how do you see the market characteristics in this country? And how does AccorHotels respond to these?
Thanks to the government’s commitment in promoting Indonesia to the international market, we will see the increasing interests in the country, including the new 10 destinations beyond Bali. Indonesia has massive tourism potential – from the natural beauty, the mixture of traditions, the hospitable people – and also the price competitiveness that attract travellers from all over the world. AccorHotels supports the efforts actively and has been working together with the Ministry of Tourism to promote and bring international market into the country.
In the meantime, domestic market plays an important number for this country. Rising middle class market has also opened more opportunities for the midscale and economy hotel brands. Having a powerful digital capability, AccorHotels encourages growth of direct bookings for the loyalty and potential guests. Guests can find various favourable and competitive offers online and get generous benefits by visiting AccorHotels.
Some time ago, the MICE hospitality was under pressure when the Indonesian government banned many government meetings that were delivered at hotels. How does AccorHotels see and deal with the situation, especially for the hotel developments in this class?
During tough business condition, i.e. significant decrease from MICE business, thanks to its powerful digital strategy, AccorHotels adapted, and put most of the push to online business, by offering various attractive packages and developing opportunities with business partnership. Currently, the situation has returned to nearly normal conditions, hotels start to accommodate business from government
The number of tourists coming to Indonesia is not as significant as to those visiting Malaysia or Singapore. Does this fact serve AccorHotels as a threat or benefit realizing the potential market ahead?
Indeed, Indonesia has huge potential in tourism development to attract foreigners coming to Indonesia. Indonesia’s President Joko Widodo has recognized tourism as an emerging leading sector, and has set ambitious target to reach 20 million visitors by 2019. We see various policies and incentives have been launched to intensify foreign investments in Indonesia. Ministry of Tourism opens promotions to new tourism destinations beyond Bali. The Indonesian government puts strong commitments to improve the infrastructure and also accessibility. With all the continuous support from government, tourism will benefit more if we have more travellers – international and domestic. It’s in AccorHotels’ key strategies to work closely with Ministry of Tourism to continuously promote Indonesia.
What is the main challenge you faced last year and also this year?
Last year, Indonesia tourism market saw a significant decrease due to the limitation of government business. This year, Indonesia and the rest of the world have experienced terrorist threats which have eventually put on hold certain travel plans and business, i.e. for Jakarta and recently also Bali.
The 100th AccorHotels property Novotel Makassar Grand Shayla City Centre has recently opened. You said AccorHotels targets to open 200 hotels in Indonesia by 2020. What is the company’s strategy to attain that in only four years?
With unrivalled expertise in hospitality industry of more than 20 years in Indonesia, AccorHotels has gained a respectable, proven trust from the established partners and potential owners. The group has committed to consistently bring exceptional products to support Indonesia’s tourism growth, and generate business for the existing network.
AccorHotels in Indonesia has some of the flagship projects including two Sofitel properties, five Pullman hotels, one hotel each for Grand Mercure and MGallery collection, more than ten Novotels, plus a number of Mercure and ibis family properties to cater to the demand of the country’s growing middle class. Already located in Indonesia’s major key destinations such as Bali and Jakarta, AccorHotels will continue opening hotels in secondary cities such as Samarinda, Berau, Pangkalan Bun, Palangkaraya, Pekalongan, Cirebon and Gresik, where the group is committed to opening up new frontiers for domestic and international travellers.
AccorHotels’ brands range from Ibis Budget to Sofitel Legend. Technically and strategically, what actions does AccorHotels undertake to accommodate to those spectrums and enter Indonesia, Malaysia and Singapore’s market?
With recent acquisition of Raffles, Fairmont and Swissôtel and those iconic brands addition to AccorHotels luxury brands, the group now manages 18 hotel brands, from luxury to economy brands. Digital strategy is one of the major key levers for our hotels, together with AccorHotels powerful distribution network, it has generated more than 60% of the business. AccorHotels website receives more than 324 million visits within 32 geolocalised versions and 13 brand websites. The group has a very strong loyalty member of nearly 25 million Le Club AccorHotels. AccorHotels also actively promotes sustainable development program for environment protections through its Planet 21 and ISO certifications.
Most importantly, the group believes the best investment of the talents. The group has an admirable, proven recruitment and training initiatives with its in-house Académie Accor.
What do you fore see about the upscale market in Indonesia?
With the recent FRHI acquisition, AccorHotels globally manages more than 450 hotels worldwide. Currently there are four luxury hotels in Indonesia; Raffles Jakarta, Fairmont Jakarta, Fairmont Bali Sanur Beach, Sofitel Bali Nusa Dua. Within the next few years, AccorHotels will add at least three luxury hotels under Sofitel and Fairmont brands in Indonesia. We have seen a growing numbers of luxurious properties in Indonesia, especially in Jakarta and Bali. However, AccorHotels takes a thorough research when manages the luxury hotel, relating to the location and accessibility.
There are many heritage hotels located in this country, one of them is The Phoenix Yogyakarta which we featured last year. Could you explain the contributions made by historical and boutiques hotels operated by AccorHotels through MGallery in Indonesia?
MGallery hotels overall are the collections of high-end hotels, each of them stages with unique personality and story; some hotels present “Heritage” origins, places filled with history; others reflect an aesthetic universe, a style, the “Signature” of a personality that contributed to their creation; others promise a purely relaxing time, “Serenity” in a natural or urban retreat.
The unique heritage hotels, such as MGallery by Sofitel in Yogyakarta and in Solo, enrich our luxury hotels profiles. The Phoenix Hotel Yogyakarta offers a memorable journey “into the past” in an antique Mercedes Benz dating back to 1961 to discover an authentic experience and secrets of the city has to offer. The Royal Surakarta Heritage Solo mesmerizes the guests with the selection of unique décor taking the Javanese heritage batik ornaments into the next level. These heritage hotels certainly provide unique, memorable moments and experience that are certainly sought by our guests.
The digital era has familiarized people to make hotel bookings digitally. I believe this serves AccorHotels as an advantage. What is AccorHotels’ strategy in maximizing as well as providing optimum convenience to guests who use the technology?
AccorHotels reinvents its customer experience through digital technology and has invested a five-year, €225-million investment plan since 2014. The digital transformation takes stage to define AccorHotels’ strategic ambition, leading the digital hospitality. This plan includes four customer-focused programs that aim to improve guest experience such as the welcome and the services. It started with one single mobile application incorporating all AccorHotels’ services before, during, and after hotel stays. The plan also entails developing maximum personalised services and follow-ups on taking guests’ feedback. Seamless journey will ensure convenience for customers at every stage of their experience, and develop innovative digital solutions for business through AccorHotels’ robust online platform.