AccorHotels aims high in Brazil expansion
Accor currently has 244 hotels in 100 cities, which already makes it Brazil’s largest hotel operator.
Although the country’s longest and deepest recession on record has reduced consumer spending, the weakness of the real against the dollar has encouraged Brazilians to holiday at home, as well as attracting more foreigners.
“We have very good business from Colombia and Argentina, and Brazilians themselves are travelling in Brazil instead of going to Europe and America,” Mr Hick explained.
In the past two years, the real has fallen about 30 per cent against the dollar, to R$3.25, a move that has benefited Brazil’s upmarket shopping centres, as the wealthy cut back on trips to Miami.
Mr Hick said that the Olympic Games, which is due to kick off in Rio de Janeiro this Friday, should also help increase Brazil’s visibility as a tourist destination in spite of the litany of problems affecting the event.
AccorHotels’ ambitious expansion plan comes as many companies are struggling to stay afloat in Brazil.
Latin America’s biggest economy is expected to shrink more than 3 per cent this year after contracting 3.8 per cent last year, while inflation and unemployment are running at about 9 and 11 per cent, respectively.
Brazil’s political crisis has led many foreign companies to put their investment plans on hold as they wait for the outcome of the final vote later this month on President Dilma Rousseff’s impeachment.
While AccorHotels has not been immune to Brazil’s problems — the country was one of worst-performing for the group in the first half, alongside France — Mr Hick says that he sees the crisis as an “opportunity more than a threat”.
Recession has made it easier to take over some of Brazil’s struggling independent hotels, he notes. “Brazil has all the ingredients to recover — it’s just part of the economic cycle,” he argues.
Structurally, the country also represents one of the biggest opportunities for the group worldwide, Mr Hick says.
While about 80 per cent of the group’s business in Asia comes from tourism and only 20 per cent from corporate clients, the inverse is true in Brazil. In São Paulo, as many as 85 per cent of hotel guests are on business.
However, by adding family-friendly facilities to existing hotels and offering package deals, the group plans to increase its leisure business to 40 per cent of its offering in Brazil by 2020.