Frederic Fontaine is sales and marketing director of Accor UK and Ireland and this month became its senior VP marketing for Mercure. He talks to ABTN about his expansion plans for the brand and how Accor has faced up to the recession
How would you describe the difference between a Novotel and a Mercure?
Novotel is a standardised brand, one where clients will always find the same look and feel, while Mercure is more a collection of individual hotels, ranging from city centre modern to more countryside properties and even resorts. Mercures are all midscale or upper midscale and there are nearly 700 hotels worldwide which makes it the second largest network, if you exclude the US, after Best Western. There's still a lot of work to be done on brand awareness and the repositioning of the brand in a clear midscale segment because in the past Mercure used to have two, three and four star hotels which clients got confused about. So we've done a lot of network screening and cleaning and moved some of those properties out. Some have become the new All Seasons brand, the sister brand to Ibis. In addition, Mercure opens up more opportunities for development.
How large is a typical Mercure?
It can be anything from 60 or 70 bedrooms to 250, but on average it's a 100-120 bedroom hotel. Some of the city centre hotels such as Bristol are over 200 and have some good size meeting rooms but no spa. The one in Sheffield is below 200 with fewer meeting rooms but it does have a spa. Mercure has larger meeting spaces than Novotel, in the UK at least. The meeting segment depends on the location, to be honest. Some hotels have business from meetings and weddings, and in fact in the UK unusually 10 out of our 30 properties have quite large meeting spaces, but Pullman is the international convention and meetings brand for Accor.
Some Mercures are franchises. It must be difficult to maintain service levels for a four star brand in those circumstances.
Yes, about 40% are franchises, with 30% managed and the rest owned and managed. But we monitor it closely. A third of our guests are emailed for feedback after their stay and of those, a third reply to us. It's a detailed questionnaire but when guests are given the opportunity they tell you a lot of useful things and we have very good scores. We are planning to roll out this tool for Mercure worldwide. Measuring quality is extremely important to ensure the clients have the experience they are looking for in a three or four star hotel.
How do you offer consistency in your product offering with elements such as WiFi in the rooms when you have so many hotels?
In the case of WiFi you rely on different providers in different countries. But we want it to be as simple for the client as possible. Some business travellers want consistency above anything else, but as the big driving force for corporate negotiations, it's very much linked to location and rates. Sso in terms of consistency they may stay in either a Novotel or Mercure since there isn't a price differential between the two brands.
Will Mercure expand?
Yes. We need more properties everywhere. We have just over 670 and we'd like to be around 1000 by 2015. It's originally a European brand, so we are strongly represented there. But we are also in Brazil, Australia, where we are a market leader, and Asia. We have a French birth certificate. Accor is by far Europe's biggest hotel company with over 200,000 rooms. Clearly the US is a market where we have not been traditionally strong in the midscale segment, though we have the Motel 6 there for budget. For Mercure we still have a lot of opportunities. In the UK we have 31 properties, but we could have 100 properties easily.
Is it possible to stimulate business travel in times like this?
Good question. We've done two things at Accor. We've launched a programme called Away on Business, a SME targeted loyalty product, and in addition we have a number of promotions running on our loyalty card programme A Club. We launched A Club in October of last year and we now have 2.3m members worldwide. We planned to launch the programme well before the crisis, so it wasn't triggered by that> But it couldn't have come at a better time. We wanted the programme to be very simple. You stay in a hotel, you earn points depending on how many Euros you have spent, and once you have reached a certain level you convert them in €40 vouchers, and you can use it on any rate, at any time, with no blackout periods at any participating hotel. It's like a cash back loyalty programme. We made an assumption that 70% of the points would be converted into airline points, and 30% would be redeemed in the hotels. The reality is completely reversed. People are using them to redeem in the hotels, they are looking to get the cash out of the points.
And the SME programme?
It's a worldwide programme, but we did a lot of promotion in the UK and over the last three or four months we have added another 1000 new companies. So overall for the UK we probably have 2500 companies and we've made deals with the British Chamber of Commerce as well. There's no minimum spend. It's a very easy programme - free to join, easy to use. If they book on the web, they get a booking code, they get a fast track to the silver level of the programme and it offers then 10% off whatever rate they see on the web or vouchers, depending on the brand. We are not funnelling the client into this is the only way you can book. You see the promotional rates as well, and you can get the reduction on those as well. We are not aiming to steal any business from any TMCs or companies which are structured. We are looking at small companies that haven't an organised travel management tool.
Would that model work for larger companies? Will it mean the end of the RFP process?
RFP is a very lengthy costly process. In an ideal world I'd recommend dynamic pricing to companies, but procurement departments want a fixed rate so I'd say the RFP process comes from the clients. We have the Global Account Offer for larger companies where you have a range of discounts that vary depending on the amount of business you give Accor. What companies tend to do is if they have ten destinations their employees regularly travel to, five of them might be essential and they arrange a fixed rate for those. On the five others they are happy to take the Global Account Offer and we link the two together. Hopefully the client gets the best of both worlds. I expect next year's RFP process t be difficult as clients come back to negotiate. But I'm feeling quite positive for next year because companies will need to increase their travelling. There hasn't been a trade down from one brand to another. It's all down.
Do you invest in a downturn such as this?
Well it's a combination of watching your costs, and also investing. You have to watch your costs of course, and adapt them to your revenues. On the other hand as a hotel company you can't, and we do not, cut capital expenditure, because you would be ruining the future. We have a much more mid-term and long term view and we are spending several millions in the UK this year. We are building a new spa at The Sofitel St James (in London), because we believe there is a need and also it is important for the positioning of the Sofitel brand. We are refurbishing the public areas of the London Novotel West in Hammersmith. At the Southgate Mercure in Exeter, we worked with the owner there and added another 40 rooms.