The Orient Express hotel brand is poised to return to the marketplace this year under the direction of Chris Cahill in partnership with brand owner SNCF (French Railways).
The move plays into Accor’s bigger strategy to emphasize luxury and lifestyle growth around the world. Along with Orient Express (will it buy the Belmond assets?), it has the Pullman, MGallery, Grand Mercure and most recently 21c Museum Hotels, along with its more pure luxury Fairmont, Raffles and Sofitel brands, to help deliver on that strategy.
Cahill wants more lifestyle brands, hence the June announcement that AccorHotels will acquire a 50% stake in Sbe Entertainment Group, which includes Delano and Mondrian, as well restaurants and nightclubs.
He took over the “Lux Group,” as insiders call it, in 2016, after 19 years at Fairmont, and was CEO of AccorHotels Luxury Brands until last week, when he was appointed deputy CEO of Accor in charge of hotel operations. Although process-driven, he keeps an open mind, keenly observing trends and alert to the impact of social media. Uppermost in his mind is brand power. HOTELS Investment Outlook recently spoke to Cahill to gain greater insight into the Lux Group’s strategy.
HOTELS Investment Outlook: Can you elaborate on the new incarnation of Orient Express Hotels?
Chris Cahill: The name itself has tremendous awareness. When you look at the numbers globally, it’s staggering how many people are aware of the name Orient Express, and most people associate it with the movie, the book or the train. We’ve been working on three or four different opportunities but it will be a luxury brand, positioned with Fairmont and Raffles, and differentiated by its heritage.We have the ability to modify existing hotels fairly efficiently and effectively to convert them to the Orient Express brand. It’ll be more boutique than Fairmont or Raffles, with strong elements of F&B, and artwork will be another key feature of the property to reflect the glamour of that era. We’ll play on the research and the positioning, with contemporized styling around people’s image of the glamour of travel.
HIO: What’s next for luxury customers?
CC: Broadly, it’s becoming more about self-fulfillment, on the leisure side. The consumer is looking for every experience to somehow change their life. Because of the growth in tourism, people are going further and further afield, and what we used to think of as secondary or tertiary destinations are going to become more important because people want to go where no man has gone before, and they’re going to want to continue to push the envelope. Consumers are defining luxury differently, depending not on their age group but on their psychographic niche. I was with a person I’ve known for 30 years who has a huge tour company, and he’s going off for 10 days, sleeping in the equivalent of a dorm with 25 strangers, on a unique trekking activity – this is a luxury traveler and it’s his intention that they’re going to have unique experiences. It’s a self-definition of both luxury and experiences, and from a brand or marketing perspective, it becomes more challenging because everyone’s defining it on their own terms.
HIO: Do you see any gaps in the luxury portfolio?
CC: As far as geographical holes, clearly in the luxury portfolio we do not have enough concentration in North America. We have pretty good distribution with Fairmont but even there we could use more. Sofitel could use more… Across the world, there are definitely places where we could use more in any one of the brands and we have a target list that we focus on, but none of our brands are over-penetrated in any market.We have So, which is a luxury lifestyle brand spin-off from Sofitel, and we’ve added a few more brands into that category. Other than that we don’t feel like we’re missing a lot in the luxury category. We also have an agreement with Banyan Tree, which is a brand we support and have partnered with.
HIO: Are there any new luxury destinations in the world?
CC: If I look through the list of where we’re putting hotels, for some, I’m not sure yet that it’s an upcoming destination, but a builder or a developer is convinced and so it may turn out that way. I was talking to a guy last week who wants to build a hotel on what he believes is the best beach in the whole of Vietnam and his attitude is, ‘If you build it they will come’ — there’s literally nothing there. It’s that type of thing all over. You can almost pick any country and people are looking away from the heavily populated areas or natural tourism destinations and saying, ‘What if we go over here where there’s nobody, and see what happens.’ I think it will continue that way with different types of product, design, flexible notions about quality, building in unique elements and it all coming together in unique locations. Now you have the level of unpredictability or surprise and delight, and people are willing to take a chance and go and see it. Of course, with social media, even small, remote places can become instant successes just because someone has been there and it captured their imagination.
HIO: Is your development approach strategic or opportunistic?
CC: You start from ‘where do we need to be’ and highlight the key cities by continent, but then you’ll end up with stuff that’s out of left field. Someone comes along with a project where the hotel’s a certain quality and, in some cases, the owner or developer wants a certain brand.You probably end up more than 50/50 opportunistic because it’s not always easy to find the right hotel in the right market. The markets you want to be in are the ones that are really important to our customer, and they tend to be more difficult to get into.
HIO: What challenges do you see in the hotel industry right now?
CC: With consolidation, the danger is that brands lose their identity. That would be the challenge for the large multi-brand groups. We do three things: We make sure the brand teams don’t co-mingle; when it comes to operations, those teams only look after luxury or upper upscale and don’t bleed over into any other brand sectors; and we build talent and culture into our group so that when it comes to orientation, training, the selection process, they’re doing it on the basis of each brand’s requirements — not a generic process but one that’s designed for each brand.
HIO: What does the future hold for you?
CC: My goal is to see this group of brands achieve their potential in terms of recognition, footprint and platform. I’ve been in this business my whole life and the challenges are different. The opportunities are immense. We’ve got such a strong group of brands, people are very supportive and guests are happy. I don’t look beyond the job that I’m doing right now with any interest at all.