InterContinental Hotels Group PLC Chief Financial Officer, Tom Singer, reviews the company’s half year results for 2013
Just the kind of news I like to see hitting my inbox, after all, you know how much I hate paying for Wi-Fi in hotels. Accor, the name behind brands such as Ibis, Mercure and Novotel, have announced that they are to offer free Wi-Fi across 194 properties in the UK.
Accor will be officially rolling out free Wi-Fi in all Ibis budget, Ibis, Ibis Styles, Novotel, Mercure, Pullman and MGallery hotels in the UK, most importantly incorporating all bedrooms and public areas. When I saw the announcement I did wonder if it would include bedrooms (as so many chains have led with similar PR exercises, but only provided coverage in reception) so this is good to see.
The service will provide visitors at Accor hotels, including 59 Ibis hotels, 76 Mercure hotels and 31 Novotel branded hotels, with access to free, high quality Wi-Fi throughout their stay, with many hotels offering the fibre optic Wi-Fi to guarantee the best possible service. Guests will be able to access free Wi-Fi in bedrooms, meeting rooms and all public areas of the hotel.
Accor go on to say that this initiative is in-line with their wider commitment to emphasising guest satisfaction for both business and leisure customers and follows industry research from the BDRC highlighting the significance of free Wi-Fi for hotel guests (they could have just asked me). Recent figures revealed that free Wi-Fi throughout hotels is the most important factor for business travellers when choosing where to stay. Demand for high quality, free Wi-Fi has been boosted in recent years by the increased use of connected devices such as tablets.
Thomas Dubaere, Managing Director of Accor UK & Ireland explains, “Free Wi-Fi has become the norm at many coffee houses or bars but in the past with hotel groups it can vary from property to property, and differ between the public areas to bedrooms. We recognise that guests expect to have free Wi-Fi wherever they are in the hotel and for it to be a quick, high quality connection.
This is why we invested across all our brands in the UK in super, fibre-optic Wi-Fi so that guests can use smartphones, tablets, laptops – whatever technology device – at ease, anywhere in the hotel and for no charge.”
Now the small print (but in line with what you’d expect) – the hotels will offer free Wi-Fi to 512k, which allows guest to browse the Internet and check emails at an efficient speed. Premium high speed Wi-Fi is available to buy in many properties using fibre optic Internet, ideal for data streaming.
Will the other global chains now follow suit?
Hotel metasearch engine Room 77 announced last night that it has closed $30.3 million in Series C financing with participation from a brand new investor Expedia. The company’s existing investors also participated, including Sutter Hill Ventures, General Catalyst Partners, Concur Technologies, Felicis Ventures as well as Expedia’s founder Rich Barton, former Expedia CEO Erik Blachford and Spencer Rascoff, CEO of Zillow. This brings Room 77’s total capital raised to $43.8 million.
As most readers will know, I love the great work that the team behind Room 77 are doing – they are fundamentally challenging the way consumers search and shop for hotels and instantly search hundreds of travel sites at once to find the best hotel at the best price. The company combine this with some great technology to enable a unique shopping experience (see previous posts here). Since launching its hotel metasearch platform a year ago, Room 77 bookings and revenue have accelerated dramatically. In the past nine months alone, the company has driven hundreds of thousands of room nights through its marketplace, recording significant month-over-month growth.
By combining fast and comprehensive search technology with unprecedented service, Room 77 claim they are proving it helps users save time and money whilst getting them a great room. Based on internal analysis of more than five million hotel searches, Room 77 uncovered at least one lower price for travellers in two out of three searches, averaging $72 per stay. The real asset to me is Room 77’s “Room Concierge” service, which leverages the company’s proprietary room data, such as blueprints and simulated RoomViewSM technology, to help travellers get in a great room when they book through Room 77.
“We believe metasearch is an increasingly important model and complementary to our travel transaction businesses,” said Dara Khosrowshahi, Expedia, Inc. President and Chief Executive Officer. “The level of innovation and depth of content at Room 77 excites us about its future role in this important customer acquisition channel.”
COO of Room 77 Kevin Fliess commented: “Room 77 is obsessed with helping travellers uncover the best hotel deal anywhere in one fast and easy search. Our investors recognize the inherent value of metasearch and the importance of rapid innovation in this category, and we’re delighted to welcome Expedia, Inc. to this esteemed group. As recent events in this category demonstrate, hotel metasearch represents a massive market and huge global opportunity. This round will only help Room 77 grow our marketplace to help travellers around the world find great hotel deals which, in turn, drive incremental business and revenue to our hotel and travel agency partners.”
Room 77 expects to use the additional capital to grow its team with top talent; expand into new markets; increase investment in product; engineering and room-level content; and step up its marketing efforts to build a world-class brand.
When I first heard the news I immediately thought that Expedia were on the way to buying the company, or more to the point, buying the technology that Room 77 have built their business on, after all their search is far superior. But I was somewhat pleased to read that Expedia do not hold a majority stake in Room 77 and the company is retained by founder Brad Gerstner. Congratulations Room 77 – we look forward to seeing what 2013 brings!
Expedia gave the online travel world some exciting news before Christmas, announcing their entry into a definitive agreement to acquire a 61.6% equity position in Trivago for total consideration of €477 million (approximately US$632 million) including €434 million in cash as well as €43 million in Expedia, Inc. common stock. Expedia, Inc. expects the deal to be accretive to adjusted earnings per share in 2013. Trivago are a leading metasearch company headquartered in Dusseldorf, Germany and this move clearly is a fight back to the other big news Q4 2012 which saw Priceline buy Kayak. Queue the online travel fight!
Commenting on the acquisition, Dara Khosrowshahi, Expedia President and Cheif Executive Officer said: “The Trivago team built one of the largest, fastest growing and most well known travel sites in Europe conducting more than 100 million hotel searches annually through a culture focused on developing great products, building a strong brand and promoting partners’ businesses. These attributes closely align with our Expedia, Inc. strategy and values and we are thrilled to have them join our portfolio.”
Founded seven years ago, Trivago quickly grew into a consumer champion for hotel accommodation featuring comprehensive search results from over 600,000 hotels across over 140 booking sites in over 30 countries in 23 languages. Through its primarily cost-per-click revenue model, Trivago profitably doubled revenue each year since 2008 and currently expects to deliver approximately €100 million in net revenue for 2012.
“We are very excited to join the Expedia, Inc. portfolio and eager to learn from their experience, having built-up some of the world’s most trusted travel brands,” said Rolf Schromgens, Trivago co-founder and Managing Director. “Our passion and focus will remain on independently evolving our comprehensive and individualized hotel search. We will stay committed to our mission: To empower consumers to find their ideal hotel at the lowest possible rates.”
The deal is anticipated to close during the first half of 2013 pending approval from relevant competition authorities. Post close, the Trivago co-founders and management team will continue to operate independently based out of Trivago’s headquarters in Dusseldorf, Germany – very much as was announced in the Kayak/Priceline deal.
Expedia already house big travel brands such as Hotels.com, Hotwire, Egencia, Venere and Classic Vacations, adding Trivago adds even more power to the hotel side of their business and makes for an interested landscape in giant OTA’s. On the news, Priceline’s shares were down a fraction and Expedia flat in late trading during that Monday’s trading session.
Lot’s of news coming out of Accor Hospitality recently, and today we hear that they have entered into agreements to acquire new properties which will become the sites for four new Accor hotels in the UK. One of the new hotels will be located in London and the others in Edinburgh.
The London hotel, which will be located at Canary Wharf will be owned and managed by Accor as a Novotel, comprising 310 rooms and is due to open by mid 2015.
In Edinburgh an Accor owned and managed hotel will open on St Andrews Square in the second half of 2013. It will operate as an Ibis Styles and will have 103 rooms with the other two hotels in Edinburgh, which are leased properties, being located at Edinburgh Park and SoCo Edinburgh, a new development in the heart of the old town. They will also operate under the Ibis brand and will open in 2013 and 2014 respectively.
Thomas Dubaere, Managing Director, Accor UK & Ireland said: “Our investment in these four new hotels, two of which we will own and manage, is another step in our strategy to build on our leadership position and further grow Accor’s presence in the UK. It is also part of our flexible active asset management plan. While we are focused on reducing our portfolio’s capital intensity, we have the financial strength to invest in owned assets, for key locations and flagship hotels for our brands.”
Accor currently operates 188 hotels in the UK and is on target to operate 300 by 2015
I just read the news announced last week by Travelodge that in what they claim to be a UK first, the budget hotel brand has launched a hotel room which features a cosmic ceiling night sky panorama, with the aim to help their customers get a good night’s sleep.
The bespoke night sky room has been created by artistically transforming a standard white ceiling into a cosmic sky which features shooting stars, milky ways and constellations of twinkling stars via a unique paint – which absorbs and retains natural daylight. During the day the ceiling looks like any standard white room ceiling but as darkness falls the ceiling magically transforms into a cosmic night sky – which cleverly lasts until dawn. This idea has been created as a direct response from the company’s latest sleep study in which the chain surveyed some 2,000 adults in order to investigate the nation’s most desirable sleeping locations. Delving a little deeper into the nation’s fascination with stars the study also found that over a half of Britons (52%) think there is something very magical about a starry night (although if quite the same can be said for experiencing this inside a budget hotel room can be achieved, I’ll let you decide).
Shakila Ahmed from Travelodge commented: “As part of our commitment in helping to ensure our customers attain a good night’s sleep, we are constantly looking at innovative sleep aids. Therefore in response to our latest sleep study, which highlighted Britons most desirable place to nod off is under a blanket of stars, we took the challenge and created the ultimate outdoor sleeping experience indoors. Now our customers can gaze into a cosmic night sky of shooting stars, milky ways and constellations of twinkling stars from the comfort of their warm cosy bed.”
Chris Idzikowski, Director of Edinburgh Sleep Centre, said: “This new innovation can help towards attaining a good night’s sleep. The way it works supports our natural sleep / wake cycle. In darkness our brain’s (pineal gland) releases melatonin, the hormone of darkness which supports sleep. Whilst dawn light is very important for keeping the biological clock ticking to the right time. The Travelodge night sky room replicates the natural environment which our ancestors would have experienced in the savannah grasslands during the evolution of human sleep patterns.”
Further findings from the sleep study revealed that 28% of British adults would love to sleep under the stars every night because it would help them to nod off easily. Whilst one in ten Britons would love to transform their bedroom ceiling to a starry night sky so that they can achieve a good night’s sleep.
The Travelodge cosmic night sky panorama hotel room is available at the following hotels:
- Birmingham Bull Ring Travelodge
- Blackpool South Shore Travelodge
- Bournemouth Seafront Travelodge
- Bristol Central Mitchell Lane Travelodge
- Cardiff Atlantic Wharf Travelodge
- Edinburgh Central Waterloo Travelodge
- Liverpool Strand Travelodge
- London City Road Travelodge
- Manchester Central Arena Travelodge
- Newcastle Central Travelodge
- Newquay Travelodge
- Torquay Travelodge
What I find strange is that I have been unable to find or book one of these rooms via the Travelodge website. I have search for several of the hotels offering these rooms and can find no description of this offering in the general hotel information of in the rooms and rates tabs. This leads me to wonder if these rooms are avaialble at an extra supplement, and if so, how much.
Please let me know if you experience one of these new rooms, we’d love to hear what you think and how well you slept. Please leave your feedback in the comments section of this post.
Accor pinpoint the reason for these changes as a hotel market that is facing major challenges today with greater segmentation and increasingly specific customer expectations which call for strongly positioned brands – with Accor defining these organisational changes as an opportunity to “reinvent the business model of its brands”.
This new organisation structure concerns Accor’s activities in 15 countries in Western and Central Europe across eight brands: Pullman, MGallery, Mercure, Novotel, Suite Novotel, Ibis, Ibis Styles and Ibis Budget, representing some 210,000 rooms and nearly 2,000 hotels. At the head of each brand or group of brands is a Chief Operating Officer Europe, assisted by a support team reporting to him, dedicated to the brand and comprising expertise in key areas such as marketing, human resources, management control and technical standards. The geographical scope of this organisation structure is divided into four main regions: Northern Europe, Southern Europe, Central Europe and France, with a Brand SVP for each region.
“This organisation structure will enable us to develop first-rate specialists in each market segment and rely on teams that are entirely focused on their brands and have perfect knowledge of both their customers and their competitors”, explains Yann Caillère, President and Chief Operating Officer. “It is also essential to strengthen our relations with our partners and at the same time it will offer new development opportunities to our employees.”
Accor hope that the new organisation structure will deepen relationships exchanges between the nearly 400 franchised owners operating hotels in this region allowing them to be able to have dialogue with the dedicated teams, giving them easier access to the brand manager, and there will be greater opportunities for exchange of best practices between European franchisees.
In the framework of this new brand-based organisation of operations in Europe, the following appointments have been made:
- Christophe Alaux, Chief Operating Officer, Mercure & MGallery Europe
Christophe Alaux is a graduate of the Institut d’Etudes Politiques in Paris and holds an advanced degree in Management. He began his career in 1990 at PSA Peugeot Citroën as labour relations manager in a production center. From 1994 to 1999, he carried out various missions for Accenture in the field of organization and performance improvement. He then joined Promodès, where he served as Vice President Organization and Human Resources for Continent before joining Carrefour France’s Executive Committee as Vice President Organization, Systems and Supply Chain. After a period as an operating executive at a Carrefour hypermarket, Christophe Alaux was appointed Regional Operating Officer of Carrefour in Shanghai and Zhejiang province in 2005. In 2007, he became Chief Operating Officer and member of the Executive Committee of Carrefour Taiwan. In 2008, Christophe Alaux joined Accor as Chief Operating Officer, Hotels France. He will keep this responsibility within the new organization.
- Jean-Paul Philippon, Chief Operating Officer, Novotel & Suite Novotel Europe
Jean-Paul Philippon is a graduate of the Clermont Ferrand Hotel School and has a technical diploma in hotel management from the Tarbes Chamber of Commerce. He joined Accor in 1979 as General Manager Novotel Marseille Est before becoming Deputy Director Sofitel, Novotel, Mercure, Marseille region in 1983. He subsequently served as Regional Director Sofitel and later as Chief Operating Officer Sofitel Europe between 1987 and 1997. In 1998 he was appointed Regional Director, Sofitel, Novotel, Mercure and Northern Latin America and in 2002 became Managing Director of Ibis France. He has served as Chief Operating Officer, Hotels Southern Europe since 2007.
- Christophe Vanswieten, Chief Operating Officer, Pullman Europe
Christophe Vanswieten is a graduate of the COOVI Hotel Management School in Brussels. He began his career in the Novotel Brussels Airport as F&B manager. He then managed various Novotel hotels in Belgium before being appointed Chief Operating Officer Accor Belgium. He became Chief Operating Officer BeNeLux in 2006. In July 2009, he became Chief Operating Officer, Accor Hotels Benelux, Switzerland and Scandinavia and Director of the All Seasons brand. In 2012, he was Chief Operating Officer BeNelux, Switzerland, United Kingdom and Ireland.
- Peter Verhoeven, Chief Operating Officer, Ibis brands Europe
Peter Verhoeven holds an MBA from INSEAD and a Bachelor’s Degree from the Hotelschool The Hague. He began his career in operations with Golden Tulip International in Ghana and Gran Dorado in the Netherlands. After 10 years with Disneyland Paris in senior leadership roles in Operations, Marketing and Sales, he joined Avis in the United Kingdom as Director of Sales for Europe, Africa, Middle East and Asia. In 2007, Peter Verhoeven joined Accor as Managing Director, The Netherlands. He has served as Chief Operating Officer for Accor in Germany since 2009.