Overseeing A Global Hotel's Inventory In Asia Pacific Region

Michael IssenbergAccor is one of the biggest hotel groups around the globe, and managing all of the group's rooms in Asia is a monumental task. Michael Issenberg has played a pivotal role in the success of Accor's hotel and tourism network across the Asia Pacific region and is tasked with keeping the company growing in China.

He started with Accor Asia Pacific in 1994 as a regional general manager before being promoted to chief executive officer of Accor's hotel and tourism operations in Australia, New Zealand and the South Pacific in 1994. In 1998 he was appointed managing director for the region. Under his stewardship, Accor's hotel network in Australia and New Zealand grew from 40 hotel to over 110 hotels. Issenberg is also responsible for the company's interests in a range of associated businesses in Australia, including the Cairns Reef Casino, Sydney Convention & Exhibition Centre, Summit Restaurant, Blue Line Cruises and Accor Premiere Vacation Club, the company's joint-venture timeshare subsidiary in Australia.

Issenberg was appointed managing director for the entire Asia Pacific in early 2003, making him responsible for a network of over 210 hotels and 40,000 rooms in 15 countries. The Asia Pacific region is one of Accor's priority regions for expansion, and Issenberg is a keen supporter of Asia Pacific tourism development and is currently Deputy Chairman of Tourism Task Force Australia, the country's leading industry representative group.

What are the primary requirements for whether you will choose to launch Sofitel, Novotel, Mercure, Ibis, All Seasons or Formule 1 brands in a particular area in China?

Our aim is to have a comprehensive range of hotel styles in China's major business and tourist destinations. We will establish our high-profile Sofitel and Novotel brands in China's key gateway cities – such as Beijing, Shanghai and Guangzhou – then we look at secondary cities for our wider range of brands, particularly the economy Ibis brand. At the moment our priority is to open a flagship Sofitel Wanda Beijing, which will open in July, as well as Sofitels in Macau and Guangzhou, but of equal importance is the expansion of our Ibis brand in rapidly growing regional centers such as Wuxi, Zhongshan, Jinan and Shaoxing. Accor is the principal investor in our Ibis expansion because we want the product to be very standardized and we want to roll-out the network very quickly, where as for most of our other brands, we grow the network through management contracts.

How do you see your Ibis brand competing with domestic Chinese chains in the future and how do you plan to differentiate Ibis from competitors?
One of the great advantages of our rapid expansion of Ibis is that we are ahead of all our international competitors. There are domestic chains growing in this sector of the market, but as the Chinese become more frequent travelers they really like the idea of the international ‘guarantee' of quality. Ibis is an international brand so maintaining standards is an absolute priority for us. When we entered the 3-star market we found many domestic hotels competing for the same market, but the one area that really let many of these hotels down was consistency, or lack of it. For the same price you could get a good hotel experience or a poor hotel stay, where as with Ibis, travelers know precisely what they can expect and the delivery will be uniform – and at a rate (about 160RMB per night) that competes head-on with our domestic rivals.

An important next step for the Ibis brand will be when it opens in cities such as Beijing and Shanghai because this will give the brand even higher profile. So far, we have been very successful with our choice of locations for Ibis because to date they have opened up and filled from the first night. We've generally opened in business areas where there is strong demand, particularly from the corporate market, and only limited quality hotel supply.

What are key requirements you look for from hotel owners when you choose to work with them?
One of the secrets of our rapid growth in the past two years has been our choice of partners. We are working with a relatively large group of owners and with many of them we are operating multiple hotels – a good reflection of the success we've achieved. We work with owners already well-established in the hotel sector – such as Jin Jiang and Beijing Tourism Group (BTG) – but we also have many owners who are unfamiliar with hotels and they have chosen us because we offer a strong alternative to the American chains as well as expertise across all segments of the hotel industry. That gives us a unique position in the hotel industry in China. Where as, traditionally, US hotel brands have concentrated on just one sector, we cover everything from economy to luxury hotels and have a range of locations covering the country's main business and resort locations.

Is recruitment a challenge in China? What type of programs does Accor provide to keep its Chinese staff trained?
Recruitment is becoming an increasing challenge because there has been such a dramatic and intense expansion of the hotel sector in the past few years and it is set to grow even faster in the lead-up to the Beijing Olympics. We have a policy of “growing our own” so we do a great deal of internal training and we are very pleased that ALL of our Ibis general managers, for instance, are Chinese-born recruits. We are considering the establishment of an Academie Accor style training facility in China, but for the time being we are working in-house to develop our staff as well as bringing talented professionals in from other countries around Asia to help increase skills levels.

For Accor's corporate social responsibility in China, how does the hotel audit its suppliers to ensure compliance with health and safety requirements?
We take Corporate Social Responsibility very seriously with programs designed to improve our environmental impact and community support initiatives. Our hotel are committed to purchasing only from certified hotel suppliers approved by local and national authorities. We buy equipment with China-certified safety stickers and food items with green labels. We also conduct annual licensing reviews of suppliers in terms of health and hygiene quality.