The health crisis will accelerate consolidation in the hotel sector and lead to the emergence of a new type of hotel, “on a human scale” and focused on services, with a very diverse clientele, believes the boss of Louvre Hotels Group (LHG ).
“The Covid crisis will hurt very, very badly: the consolidation was already there, Starwood Hotels was eaten by Marriott before the pandemic, but it will accelerate,” Pierre-Frédéric Roulot said on Tuesday during a meeting with the press organized by Ajef (Association of economic and financial journalists).
“The crisis could unfortunately kill 20% of the hotel industry in Europe, but it will force us to be in a new service hotel, a hotel of tomorrow, which is exciting for us”, added the president of LHG .
Initially owned by the Taittinger group, Louvre Hotels Group was bought in 2015 for 1.3 billion euros from the American fund Starwood Capital Group by the Chinese number one in the hotel industry, the conglomerate Jin Jiang – the second largest hotel group in the world after the American Marriott – owned by the city of Shanghai.
Present in 54 countries, Louvre Hotels, which generated 1.8 billion euros in annual turnover in 2019, has more than a thousand hotels in France, an offer ranging from one to five stars – First Class , Tulip Inn, Kyriad, Campanile Golden Tulip, Royal Tulip.
According to Mr. Roulot, the sector has emerged from the crisis in China, “where the Covid raged from January 15 to April 15”, and some lessons can be drawn from the changes in consumption observed in the country.
“We have gone from 40% of our hotel occupancy rate in March to 82% last week in China. Despite the two and a half months of Covid-19, we will exceed 2019,” he said. “It seems pretty crazy seen from France, Europe or even the United States, but the decline operated by China on its domestic market has been very beneficial for the activity”.
The country has abandoned the “desire to systematically move upmarket which accompanied economic growth” before the crisis, and “spent a lot to support domestic consumption: regions wrote checks for an amount representing 400 to 500 euros, to be spent during the vacation week, “reported Mr. Roulot.