How the 'asset light' revolution is transforming the industry

In the previous edition of Hotelvak (02/2024), we talked about the investment in hotels and/or hotel rooms in the dossier 'Hotel investments'. The hotelier then handles maintenance and other activities on behalf of the investor, unlike, for example, holiday homes and flats. The returns - compared to savings accounts and the like - can also be quite high.

Of course, buying a hotel room and renting it out is not the only way to invest in hotels these days. For just about all the larger hotel chains are currently going 'asset light'. Which basically means that the property is being divested, or has already been divested.

Joeri Beusen, Head of Development & Franchise Accor Benelux: "Currently, in Belgium, less than five per cent of hotel real estate is still owned by the hotel chains themselves. To be clear, we are mainly talking about the larger hotel chains here. Hotels today are almost entirely operated on a franchise basis. In short, the property is owned by an external party, that party leases the property to an operator, who in turn enters into a franchise with us, or another hotel chain. Sometimes the external party is also the operator, who then enters into the franchise with a hotel chain."

A brand for every location

"At Accor, we work with 35 to 40 operators," explains Joeri. "These operators conclude franchise agreements with us in Belgium and operate the hotels. We find that these operators often have a preference for a specific Accor brand, such as Ibis Styles, Budget, Novotel, Mercure, Mövenpick or Adagio. In total, we have about 40 brands they can choose from or indicate their preference. Each brand has its own standards that the operator has to meet."

"Depending on the location, market demand and the presence of existing brands in the area, I decide which brand is the best fit. I then assign an interested operator. These operators usually know the specific brand well, already have experience with several hotels and can therefore get started right away. 'Hit the ground running', as we say. We are often the first to be approached for a particular project and ultimately the last to sign, via the franchise contract. In between, we make sure the right operator ends up in the right place."

Part of a global network

Joeri: "Once the franchise contract is signed, we take care of the full operational implementation of the hotel. We implement Property Management Systems (PMS) and Revenue Management Systems (RMS). If necessary, we appoint key account managers who attract corporate customers, depending on the hotel's brand. We also have a loyalty system and provide comprehensive support in all possible ways. With about 5,500 hotels worldwide, we can negotiate much more favourable rates through online booking systems than an individual hotel could."

"In addition, we have our purchasing platform Astore. This platform is the partner for all catering purchases, offering a wide range of food, furniture, appliances and household products, complemented by professional services. Besides competitive prices and favourable conditions, we continue to expand our offer and adapt our services to specific needs. Our goal is to provide property brokers and operators with efficient solutions and smooth operations, both locally and globally."

Diversity in one group

"Accor offers a diverse portfolio of hotel brands spread across three pillars. The largest part (90 per cent) consists of PME (Premium, Midscale, Economy) hotels, which target a broad audience and offer a consistent, reliable experience. Then you have the Luxury and Lifestyle pillars. Under the latter is our joint venture Ennismore, which targets the market offering a more unique, lifestyle-oriented experience. Ennismore includes iconic brands like Mama Shelter, The Hoxton, Mondrian and 25hours, each of which has its own distinctive style and ambience. To maintain these individual brand identities and adapt them to the specific needs of their target audience, these brands manage their operating contracts independently," Joeri Beusen completes.