Business Management Executive Q&A
July 17, 2007
Accor North America, a division of Accor, has approximately 870 properties in the United States, Canada, and Mexico. The company's brands include Motel 6, Studio 6 (an extended-stay brand), Sofitel Hotels and Resorts, Novotel and Ibis brands. Accor made news in April when it sold the Red Roof Inn chain to a consortium including Citigroup Global Markets Holdings Inc. and Westbridge Hospitality Fund L.P. for $1.3 billion. The estimate for Accor’s room numbers, post-Red Roof Inn, is about 101,600 rooms.
Georges Le Mener, president & CEO of Accor N.A., talked with CPN Senior Editor Eugene Gilligan about what is ahead for the company.
CPNHospitality: Please talk about Accor's decision to sell the Red Roof Inn chain?
Le Mener: Accor had a change in management 18 months ago. Accor was in very diversified businesses, and the decision was made to concentrate on two main businesses-hotels and business services, such as meal vouchers, which is a major business around the world except in the U.S. The company has decided to refocus on these two businesses, and sell non-core businesses. For instance, the company had a stake in Club Med, which has been sold. An Internet business in Italy is in the process of being sold.
As owners and operators of hotels, we own lots of real estate. We want to sell some of that real estate, become less capital intensive, and move more toward a manager and franchisee model. We always want to own some real estate, but we want to be less capital intensive.
The Red Roof chain is more of a regional chain, and it was going to take a lot of investment to expand it nationally. Profits were higher in Motel 6, and if we were going to sell Red Roof, with the price of hotel assets today, now was the ideal time to do it.
CPNHospitality: What are your plans for the Motel 6 brand?
Le Mener: We want to develop both Motel 6 and Studio 6, our extended stay brand. We have 45 of Studio 6 properties today, and they are doing very well. We want to introduce a new economical model, because construction costs are increasing. We want to develop 300 properties, between these two brands, in the next five years.
CPNHospitality: Please talk about your plans for your Sofitel brand?
Le Mener: We want to reposition Sofitel, to be very upscale. We want to be just below Four Seasons and Ritz Carlton, and above Marriott and Hyatt. We also are going to launch a new brand, in late September, where we will convert some Sofitels that can't reach that level, to this new brand. We also want to expand Novotel to major North American markets.
Accor North America, a division of Accor, has approximately 870 properties in the United States, Canada, and Mexico. The company's brands include Motel 6, Studio 6 (an extended-stay brand), Sofitel Hotels and Resorts, Novotel and Ibis brands. Accor made news in April when it sold the Red Roof Inn chain to a consortium including Citigroup Global Markets Holdings Inc. and Westbridge Hospitality Fund L.P. for $1.3 billion. The estimate for Accor’s room numbers, post-Red Roof Inn, is about 101,600 rooms.
Georges Le Mener, president & CEO of Accor N.A., talked with CPN Senior Editor Eugene Gilligan about what is ahead for the company.
CPNHospitality: Please talk about Accor's decision to sell the Red Roof Inn chain?
Le Mener: Accor had a change in management 18 months ago. Accor was in very diversified businesses, and the decision was made to concentrate on two main businesses-hotels and business services, such as meal vouchers, which is a major business around the world except in the U.S. The company has decided to refocus on these two businesses, and sell non-core businesses. For instance, the company had a stake in Club Med, which has been sold. An Internet business in Italy is in the process of being sold.
As owners and operators of hotels, we own lots of real estate. We want to sell some of that real estate, become less capital intensive, and move more toward a manager and franchisee model. We always want to own some real estate, but we want to be less capital intensive.
The Red Roof chain is more of a regional chain, and it was going to take a lot of investment to expand it nationally. Profits were higher in Motel 6, and if we were going to sell Red Roof, with the price of hotel assets today, now was the ideal time to do it.
CPNHospitality: What are your plans for the Motel 6 brand?
Le Mener: We want to develop both Motel 6 and Studio 6, our extended stay brand. We have 45 of Studio 6 properties today, and they are doing very well. We want to introduce a new economical model, because construction costs are increasing. We want to develop 300 properties, between these two brands, in the next five years.
CPNHospitality: Please talk about your plans for your Sofitel brand?
Le Mener: We want to reposition Sofitel, to be very upscale. We want to be just below Four Seasons and Ritz Carlton, and above Marriott and Hyatt. We also are going to launch a new brand, in late September, where we will convert some Sofitels that can't reach that level, to this new brand. We also want to expand Novotel to major North American markets.
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