Accor sees Latin American growth shifting to luxury
Accor sees Latin American growth shifting to luxury
10 JUNE 2019 7:41 AM

Accor’s shift to more luxury brands has helped development efforts in countries like Mexico, company executives said.

MIAMI—Historically a company with its biggest presence in the midscale and economy space, Accor’s recent shift to focus more on high-end segments is paying dividends in Latin America, according to one of the company’s lead executives in the region.

Speaking with Hotel News Now during the recent Hotel Opportunities Latin America conference, Alexis Ralph, VP of development for Central America, Cuba and Mexico, said the company has seen “a huge shift over the last two to three years.”

“There’s been a huge shift to luxury,” he said. “Now it’s a robust portfolio, and Mexico is one of the markets where we’re moving on with that expansion. We’ve got some great openings coming soon.”

That will include a new Sofitel property in Mexico City, he said, referring to it as one of Accor’s “core brands” and a “game changer.”

Ralph also said the company is taking advantage of its long-standing presence in Cuba, a country where the U.S.-based brands briefly threatened to enter before shifts in the political climate closed that door.

“We’ve been present there for 20 years,” he said. “It’s a market we know and has some challenges. But we have some great properties in operations, the best on the island. We’re there, and have a vision on how to grow.”

Ralph noted the company will soon open the 250-room SO/Habana Paseo del Prado.

He said the company could soon see accelerated growth in the midscale space in Mexico because it is shifting from being purely brand-managed to offering franchising with those brands.

“I think it’s going to take a little bit of time before (investors in Mexico) realize it’s available,” he said.

M&A still possible, but not pending
Accor officials have targeted the acquisition of regional brands and operators to strategically grow their presence in key areas, and Ralph said that could be on the table in countries like Mexico.

“We’re always looking, but there’s nothing we can say right now that’s concrete,” Ralph said, noting growth in Mexico is “strategic” for Accor.

He said recent acquisitions of more lifestyle-oriented brands in the U.S., including deals with 21c Museum Hotels and SBE, open up various opportunities.

The expanded portfolio, along with the company’s revamped loyalty program, could open the region to new travelers, Ralph said.

“We can reached clients of different brands, and in markets like Mexico City, that’s a big benefit,” he said.

Momentum strong amid ‘uncertain times’
There are plenty of reasons to be wary across Mexico and Central America, but he remains optimistic overall, Ralph said.

“With the recent elections (in Mexico), we’re in uncertain times and (a lot of investors) are in wait-and-see mode,” he said.

He said that reticence is more pronounced in the high-end urban, business-focused properties, where “the sentiment for investors is to be more cautious.” But he also noted that there are “great opportunities in resort properties,” noting a recently signed deal for a 181-key property in Los Cabos with a residential component.

Ralph said there seems to be strong interest in the Ibis brands, with three recent openings.

He said with 10 projects under construction in the region, nearly 4,300 rooms already opened and plans to surpass 5,000 in “the next couple of years,” Accor is enjoying solid growth.

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