Chris Cahill is CEO of Accorhotels’ luxury brands. He spoke to Tom Otley during the AccorHotels Global Meeting Exchange 2017, at the newly renovated Fairmont Rey Juan Carlos I in Barcelona.
When the merger of the Fairmont Group and Accorhotels was announced, there was a perception that the Fairmont and Raffles did luxury well, and Accor didn’t. What did you think about that?
Well, first of all I tend to like facts rather than perceptions, so I didn’t know for sure. When I went in and looked at it I was actually impressed with Sofitel’s guest satisfaction scores and employee engagement, as well as their competitive performance – so the perception is ill-deserved. We’ve got all the brands now on the same guest feedback mechanism, and Sofitel and Fairmont are side by side. I think to some extent the perception is an old one, but one of the things we have to do is change that in the mind of the consumer. Perception is a reality therefore it’s our obligation to demonstrate to people that they have the wrong perception.
Travel and meeting planners are less interested in brands than consumers, aren’t they? They just book location and capacity.
First of all, you’re going to have a natural selection based on capacity and location. But the further on you go the brand matters a hell of a lot, because the planners have got to have confidence in the reliability of the hotel. From an end-user perspective, for the transient guest it is about having a hotel in the right location, and then the facilities, but for a meeting there is so much more to it.
How price competitive to you have to be when you have brands like Pullman and Novotel in the group alongside Fairmont and Sofitel?
I don’t want the pricing to be compared with our other brands, I want it to be compared to the competition.
In a competitive marketplace with the competition from OTAs (online travel agents), MICE must be a welcome segment of business... The meeting business has always been a big core not only our segmentation, but also because your B2B customers are the ones that you have the most ability to build brand loyalty around, because they build relationships of trust.
A brand is a promise, but then on the B2B side the customer is also dealing with sales people at the hotel and GMs – and if the buyers have good experiences they want to gravitate back there because it’s one less thing to worry about and they can carry on with the planning part.
Do you think technology threatens the MICE business?
Well, for all the technology we have now people seem to want to meet up more. It’s the law of unintended circumstances. We have heard the example of how the TED talks are very popular when viewed online – but the effect of that is the more that’s online, the more people want to go to TED. It’s the exchange with other people that most people get their learning from. Think about the Consumer Electronics Show at Las Vegas, where they are championing all this new technology, yet the shows keep getting bigger.
That said, we use technology and also stay at the forefront of trends. So the Fairmont Istanbul has been designed to offer as much flexibility as possible in the meeting place, where the walls can be moved, the seats can change, and there are break-out areas that suit the occasion and can be changed.
In a luxury hotel there’s a constant change between the jeans and T-shirt crowd, so I think a fixed boardroom will be a thing of the past, because it’s too restrictive and doesn’t suit everyone. The reality is the purpose of the meeting dictates an awful lot both in terms of the venue and the technology to enhance that experience.
AirBnB is now marketing itself for events…
They are only entering into a part of this marketplace. They are taking the participant part out of the hotel block, and if they are going into it now it’s only because they realised they were getting it anyway. For most of the major US cities, that’s what they’ve been getting – they’ve been taking the pressure off peak nights.
As far as getting into meetings, they don’t pick the venue, the meeting planner does that, so it’s no different from what OTAs do. I think the fact they are marketing that they're doing this is interesting. But we see AirBnB as a supply in our ecosystem, whether transient or meetings. Complex events require a high amount of touch and AirBnB’s business model is built for the lowest amount of touch. I can’t imagine them putting in blocks of rooms and suppling the needs for an event. It’s competition, but not new competition.
How do the luxury brands play with younger customers?
Well if think about Fairmont, the fact that you have a heritage brand means you have to bring it to life. You can take the elements that people know about, the history, and update and make relevant and modernised. But we have to be careful about our core customers. Everyone talks about millennials, but quite frankly they don’t stay much in luxury hotels and if they do they don’t spend much apart from on the room. There’s a core business, and generally your B2B is what you want to look after first. You know where the customer is, the travel buyer, for instance. If you treat them well, then you tend to hang onto them, while your transient customer tends to be pretty fickle. It’s not so much that you have to constantly reinvent yourself to appeal to the customer, because many of these people aren’t our core customers.
Chris Cahill, CEO luxury brands, Accorhotels
Chris spent 19 years (1993-2012) in various capacities at Fairmont Raffles Hotels International (FRHI) and its predecessor companies, including president and chief operating officer responsible for the operating performance of all brands worldwide. Between 2012-16 he worked as executive vice-president, global operations for Las Vegas Sands Corp.
Read the interview with Cahill from 2009 when he was chief operating officer for Fairmont Raffles Hotels International