Accor CEO Sebastien Bazin believes business travel will “never return to the new normal” and that in the long term corporate numbers likely sit around 10% less than they were pre-COVID.
Short term, until mid-2021, he estimates business travel will be down 25% to 30%.
“Longer term, my expectation is going to be it will never return to new normal,” Bazin told analysts following the release of Accor’s half year results.
“It’s probably going to be like a 10% drop depending on, again, culture geographies, but the drop will be in place because many corporation will be much more astute, will go on Webex, on Zoom, those digital tools will prevail.”
However, Bazin says there may be an opportunity in this new environment, one where increasing numbers of employees will work from home, to lease out some of its hotel rooms to corporations for their workers living in cramped conditions ill-suited to productivity.
“Give the guys the alternative not to stay home because it’s too confined, not to take 1.5 hour of subways, but go 10 minutes by work, bicycling or car to the neighborhood hotels of Accor,” Bazin says.
“Do it at large with 5,000 hotels, do it on a subscription mode, give them the ability to use lobby, toilet, bar, WiFi and meeting rooms, and why not?
“You probably can have 5%, 10% of your room counts to be transferred into premises, permanent offices.”
He says Accor is already invested in the concept with 50% ownership of Wojo, the third largest European co-working player.
“I think we’re going to be able to do better than the loss of 10% from business travelers on providing that alternative at a much lesser cost, both in transportation, then in health nature and, of course, in ability to work and have people waiting for you where he won’t be waiting for you for the next meeting in the lobby of your apartment house.”