Accor Hotels Brochure – November 2018

Driving procurement transformation at AccorHotels

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Procurement transformation through a commitment to local sourcing WRIT TEN BY

OLIVIA MINNOCK PRODUCED BY

ARRON R A MPLING

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SEBASTIEN BRUNEL, SENIOR VICE PRESIDENT OF PROCUREMENT AT ACCORHOTELS, DISCUSSES THE TRAVEL & LIFESTYLE GROUP’S PROCUREMENT JOURNEY IN DRIVING GROWTH AND DELIVERING A UNIQUE GUEST EXPERIENCE WITH LOCALLY SOURCED PRODUCE

W

ith 4,600 hotels around the globe operating across 100 countries, AccorHotels is one of just a handful of hotel operators

in the world with more than 500,000 rooms to its name. As a market leader in many regions around the world, AccorHotels is now making strides 04

across North America as well – with the continent representing significant opportunities for growth and revenue. Investment in the region is revving up with acquisitions including the purchase of the Fairmont, Raffles and Swissôtel brands; an 85% stake in US-based 21c Museum Hotels, an awardwinning hospitality management company which combines a multi-venue contemporary art museum and boutique hotels; and a 50% stake in independent luxury lifestyle operator sbe Entertainment Group.

Boasting over two decades of industry experience, Senior Vice President of Procurement Sebastien Brunel is keenly aware of how the hotel industry has changed during this time, and how the evolving needs of consumers have particularly impacted procurement. “Lifestyle is something which is very new to the hospitality business,” he outlines.

“Procurement is greatly positioned in the organization and part of the leadership committee, making our function a key component for North and Central America” — Sebastien Brunel, Senior Vice President of AccorHotels

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“People, especially the younger generation, are looking for different experiences. They don’t want the traditional hotel experience or a standardized room – they want to have fun, new experiences and make connections.”

While AccorHotels currently has fewer than 100 hotels in North America, the region still reflects a notable proportion of its business and is home to some of the company’s largest properties, which average around 500 rooms and several restaurants apiece, meaning total spend is significant for 06

“Today, we’re coming back from global sourcing to more national or even local sourcing.

We have a strong desire to buy local, and work with local producers” — Sebastien Brunel, Senior Vice President of AccorHotels

Brunel and his team. Iconic hotels with global notoriety which are present in the region include the original Fairmont, Fairmont San Francisco; The Plaza, A Fairmont Managed Hotel, in New York City; Fairmont Le Chateau Frontenac in Quebec City; and Fairmont Banff Springs, amongst others.

AccorHotels initiated investments in the procurement function 25 years ago when volume in key regions started to be significant. Today, the company’s procurement function is organized

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regionally and globally, with over 20

making our function a key component

procurement organizations and more

for North and Central America,�

than 180 people around the world. The

Brunel explains.

entire function reports to Paris-based

In terms of the evolution of procure-

global Chief Procurement Officer (CPO),

ment at AccorHotels, the way services

Caroline Tissot, while all procurement

are offered has evolved thanks to

leaders in the regions have dotted lines

consumer feedback. The dynamic

to regional executives.

of buying and category management

In North America, procurement

is impacted by market trends and

also reports to Chief Operating Officer

traditional in-house services are

(COO), Kevin Frid. “Procurement is

increasingly handled by external

greatly positioned in the organization

providers. Laundry is a good example

and part of the leadership committee,

of a category historically managed w w w.a c c o rho te ls . com

Efficiency. Visibility.

Control. Compliance.

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BirchStreet increases profit and efficiency in a SaaS environment that focuses on improving business processes by automating e-Procurement, AP automation 3-Way, Spend Analytics, Recipe Management, Capital Projects, Supplier Management, Sourcing and Contract Management.

Thousands of businesses, including enterprise customers like Hyatt, Marriott, Starwood, Interstate, Omni, Four Seasons, Accor/ Fairmont, Wyndham, ClubCorp and many others, in more than 100 countries, currently subscribe to BirchStreet to connect and do business with a network of more than 400,000 suppliers.

The platform and technology connect customers with their suppliers to improve efficiency, increase transparency, provide accountability, strengthen financial controls, and reduce compliance gaps, resulting in significant business process improvements and cost savings. Most BirchStreet customers see a 10 to 15 percent overall cost reduction for all purchasing-related activities. Within a customer’s marketplace, users have access to real-time, on-demand data and pricing.

Suppliers can update their pricing and catalogs, which provides accurate pricing and availability. Cutting-edge budgeting tools specifically designed for the hospitality industry help customers plan, track and report on demand. Automating the procure-to-pay process using e-procurement and AP 3-way auto-matching and integration, results in reduced line item expenses and labor hours.

In addition, tracking, reporting and spend analytic features provide in-depth business intelligence in a centralized cloud-based platform. BirchStreet offers an easy, intuitive dashboard to give users real-time data both at

a high-level overview and at a line item detailed level. Similarly, BirchStreet’s Recipe Pad is a great mobile tool for chefs and kitchen staff that uses a simple picture-based interface; allowing chefs to browse, search, view and scale published corporate or property-level recipes through an organization’s private online recipe library. The process of automating functions in procurement, finance, operations and food and beverage contribute to a company’s overall success and bottom line.

AccuBar, an acquired company by BirchStreet in 2016 is a leading component of the BirchStreet inventory control solution that offers a cloud-based beverage inventory management to maximize beverage profits while being seamlessly connected to BirchStreet’s procureto-pay automation solution. Customers report an average of 10 to 20 percent beverage cost reduction with additional cost savings from efficiency, automation and accountability. It eliminates the guesswork for reordering with par values and alerts, and provides easy scalability for large banquets and events. AccuBar’s bar code scanner will help one person do the work of two in less time, which will drastically lower labor costs. Often, customers aren’t able to detect theft, but with AccuBar’s loss prevention functionality one can quickly hold the staff accountable for loss. Finally, instant profit reporting and business intelligence will benefit any company immediately.

Established in 2002, BirchStreet Systems is a privately held company and headquartered in Newport Beach, California, with offices in Denver, Mexico City, China, Singapore, India and Europe.

For more information, events and webinars, or to request a personal demo, please email sales@birchstreet.net or visit www.birchstreetsystems.com.

CLICK TO WATCH : CPO SEBASTIEN BRUNEL TALKS GLOBAL AND LOCAL SUPPLIES IN ACCOR’S SUPPLY CHAIN 10 in house but moving more toward exter-

the teams in the hotel with different

nal providers. “We have a big evolution

needs and expectations between the

in the way hotels are spending their

managers, chefs, executive house-

money,” he concludes.

keepers – but also the owners of the

In addition, since AccorHotels now

hotels, because it is in their best inter-

manages and franchises its hotels

est to maximize their benefits through

instead of owning the premises

a strong procurement organization.”

outright, the procurement function

As a management company, procure-

has to adapt. “We came from an asset

ment within AccorHotels is very much

heavy model to an asset light model

a service offered to its owners and

– in the past, we owned our hotels

franchisees. “We have become a

but now we have management and

strong intermediate between suppli-

franchise contracts,” says Brunel.

ers and partners, and both owners and

“As procurement professionals,

franchisees are extremely organized,

we therefore have two customers:

business driven and cost driven,” Brunel

explains. “Unless we demonstrate

started to manage non-food opera-

savings and value creation, they will not

tions in the early 2000s,” says Brunel.

use our services. We have to monitor

He adds that suppliers and other

the competitiveness of our contracts

organizations had not previously

compared to market prices, and offer

understood hotels as a category to

tracking, distribution, a loyalty program

focus on. “I would say it took between

and procurement program – procure-

five and 10 years to get a strong offer

ment is one of the key departments

of procurement solutions for hotels

to attract new ownership groups and

for food, non-food and beverage.”

franchisees.”

Brunel notes that since then, suppli-

As the business has transformed, its

ers have begun to see opportunities

supply chain has diversified and evolved,

in the ever-growing hospitality sector.

and so too has the role of procurement.

“In terms of some suppliers, a lot of

“20 years ago, 90% of our function was

businesses didn’t have a hospitality

based on food management – then we

division 10 to 15 years ago – they did not

E X E C U T I V E P R OF IL E

Sebastien Brunel Brunel has 25 years of experience in the hospitality business with 20 years in procurement. Originally from France, he has occupied several procurement functions in the global procurement office as well as working in several countries. Brunel’s first international experience was in the UK, before he then occupied a function of Category Manager in Dallas Texas in 2002.

In 2007, Brunel moved to South America to be the head of procurement of that region, based out of Sao Paulo. He went back to Paris in 2014 to manage the international team. He has occupied the position of SVP of North and Central America since January 2017 when he relocated to Toronto. Sebastien holds an MBA from the FGV University of Sao Paulo. w w w.a c c o rho te ls . com

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know how to attend to the hospitality

strong role, not so much in finding new

businesses. But now, there are people

procurement solutions but in giving

dedicated to hospitality. We work

better access to our procurement-se-

together on value creation. Competi-

lected products and services for our

tive pricing is an important element,

customers. How can we make the

but having sustainable programs,

process easier to access? How can

product development and innovation

we offer a procurement marketplace

take an important share of the day-to-

to make sure people can go to an

day of a procurement specialist – both

online catalogue?”

on the team but also at the supplier.”

Over 10 years ago, Fairmont selected

Of course, process and digitization

Birchstreet which provides procure-to-

have been key to AccorHotels’ procure-

pay solutions with the aim of improving

ment journey. “Digital is playing a very

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and cost reduction. “Birchstreet brings structure to our process. We have PO approval process, PO management, inventory management, product management and interaction between hotels and suppliers. This is essential for AccorHotels, especially in North America.”

The businesses have worked together for many years, and AccorHotels favors the platform as it works well especially for its larger properties. “They’ve been able to invest in internal workflow – hotels with over 1,500 employees need a procurement process and workflow to ensure consistency.” Birchstreet has developed this from a back-office perspective, and the solution is effective

“Guests don’t want the traditional hotel experience or a standardized room – they want to have fun, new experiences and make connections” — Sebastien Brunel, Senior Vice President of AccorHotels

for AccorHotels’ finance department.

Brunel adds that, as the partnership

The vast array of products AccorHotels

continues, he hopes to develop a system

buys, and indeed the array of suppliers

with even more benefits for front-end

it works with, presents challenges for

buyers, which he is confident can be

eprocurement. “Eprocurement works

achieved. “So far we have partnered

very well with products but it’s not as

with Birchstreet for 10 years; they’ve

simple for utility developments, such

always supported us in everything

as service companies – you can easily

we’ve done and the platform brings

buy a kilo of coffee, but one kilowatt of

efficiency, good savings and automatic

energy isn’t the same, so it’s not ideal

updates to inventory – we probably

for non-tangible contracts.”

do around US$150mn of annual spend through the Birchstreet platform.”

In addition, prioritizing the luxury experience over recent years, Acw w w.a c c o rho te ls . com

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1967 Year founded 10,000+ Approximate number

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of employees

corHotels has developed a strong

“Today, we’re coming back from global

commitment to local sourcing and

sourcing to more national or even local

as such, its supplier mix has changed.

sourcing. We have a strong desire to buy

“Our supplier base is very diverse due

local, and work with local producers

to the products we buy – we go from big

– such as sourcing fish from the coast

global companies like LG or Samsung,

of Canada, rather than importing it from

to large national companies, to smaller

Scotland or elsewhere. This is the way,

regional suppliers of fruits and vegeta-

especially in the luxury hospitality

bles or fish, with five employees,”

business, to provide local experiences.”

explains Brunel. “In North America,

Twenty years ago, AccorHotels had a

I would say 30% of our spend consists

larger range of suppliers, which through

of global providers, 40% national and

globalization was reduced – now, it is

30% regional.”

increasing again due to the Group’s

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local sourcing commitment. “We went

a cookie-cutter outcome, especially for

from a vision of needing to reduce the

the luxury businesses which account

supplier base, to a vision that we still

for an important part of AccorHotels’

need a concentrated supplier base

global operations, and are particularly

but with a lot of choice.” As a result,

prevalent in North America. “We invest

a limited number of global providers

a lot in the lifestyle element and the

consolidate more spend but there is

uniqueness of our brands, we need more

a strong need to develop diversified

products and more solutions – we don’t

local solutions and reduce logistics.

want the same headboards, lighting and

Catering for the unique demands

food all over the world and we’re not ac-

of various owners and franchisees,

quiring new companies to change them

especially since the Group’s latest

into a standardized hotel.”

brand acquisitions, is vital in avoiding

Brunel explains each of the company’s w w w.a c c o rho te ls . com

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CLICK TO WATCH : CPO SEBASTIEN BRUNEL TALKS DRIVING PROCUREMENT IN ACCORHOTELS 19 4,600 hotels across the world is treated

Despite the challenges and varia-

as a unique point of production. “It’s

tions facing the procurement function

not like the manufacturing industry

at AccorHotels, this essential element

where everything can be produced

of the business is key to the significant

and distributed from a single location.

growth Brunel looks forward to. He

Hospitality business and decentraliza-

cites the company’s latest acquisitions

tion of ordering points makes our supply

and the new openings it has celebrat-

chain very complex and diverse in

ed as a result: the 1,048-room Fairmont

terms of suppliers and products. We buy

Austin which debuted earlier this year

food, beverages, technology, intellectual

as the brand’s largest hotel in the US,

services, financial services… the quantity,

as well as the planned openings of

too, is diverse, as a small hotel might

Fairmont Century Plaza, Los Angeles;

cumulate an annual spend of $400,000

Sofitel Mexico Reforma in Mexico City

while a large hotel can spend more

and SO/ Paseo del Prado in Havana, all

than $20mn.”

in 2019. AccorHotels will also open the w w w.a c c o rho te ls . com

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first Raffles Hotel & Residences in North America in Boston as well as Fairmont Costa Canuva in Mexico’s Riviera Nayarit and Fairmont Saint Lucia in the coming years.

AccorHotels is therefore particularly committed to North America as a region of growth, where it works with over 20,000 suppliers and spends $600mn each year, from small fruit and vegetable suppliers with orders of less than $500 to larger companies receiving millions in investment. On its North American journey, Brunel says the company is keen to partner with suppliers desiring to grow outside of

“Our supplier base is very diverse due to the products we buy – we go from big global companies like LG or Samsung, and large national companies, to smaller regional suppliers of fruits and vegetables or fish, with five employees” — Sebastien Brunel, Senior Vice President of AccorHotels

w w w.a c c o rho te ls . com

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North America, such as audio-visual

customers and increase our ability to

provider PSAV. “It’s a great example:

offer more contracted solutions.

the legacy contract is coming from

Another challenge is to maintain a

North America and can be extended

good level of compliance at a national

to other places in the world.”

level, while remaining competitive

However, as AccorHotels grows in

against regional offers. The third

size and spend in North America, the

challenge is to find a way to leverage

value offer of procurement will need to

volume while also keeping the

be even further solidified, says Brunel.

uniqueness of the product. And the

“We have to work hard to show the

fourth challenge, of course, is people

importance of procurement with our

– the development and training of our

“From a customer perspective and supplier perspective, having a strong procurement organization in North America is key” — Sebastien Brunel, Senior Vice President of AccorHotels

procurement talent. In the UK, they

hospitality player without having

have CIPS (Chartered Institute of

business activities in this region. From

Procurement and Supply) qualifica-

a customer perspective and supplier

tions, but I haven’t seen many global

perspective, having a strong procure-

equivalents so we must find trained

ment organization in North America is

procurement professionals with a

key,” he concludes.

balanced commercial background.”

“We want to play a major role in North America as well as globally,” says Brunel. “We’ve started to reinvest here as we cannot be a true global w w w.a c c o rho te ls . com

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Accor Hotels Group (Global office) 82 rue Henri Farman, Issy les Moulineaux, 92130, France T +31 20 240 1680 www.accorhotels.com