Accor Takes a Leap of Faith in Franchising Movenpick in China
Movenpick: Food & Drinks is at the heart of the brand
By Raini Hamdi, 1August 2022
It’s not in Accor’s strategy to franchise its Movenpick brand. But there’s always an exception for China.
The global chain has snared a new master franchise agreement with Sunmei Digital Intelligence Group (formerly Sunmei Group) to shake up Movenpick’s moribund expansion in China, where there is only one Movenpick in operation, in Enshi, Hubei province. The hotel was signed before Accor acquired Movenpick Hotels & Resorts in 2018.
Prior to the acquisition, Movenpick had focused more on expansion outside China in the rest of Asia. There are now 23 hotels in operation in Asia and another 10 in the pipeline. All are managed.
From the lone Enshi property, Sunmei and Accor plan to turbo-charge Movenpick’s growth in the mainland to 400 hotels. That’s roughly four times more than the number of Movenpick properties there are in operation worldwide today.
Such big targets aren’t unusual in China, whose domestic market is way bigger than its outbound. In 2019, six billion domestic trips were recorded, compared with just 155 million outbound trips. Accor is counting on the deal to build the loyalty of Chinese guests, so they would also stay at Movenpick, and the chain’s 40-plus other brands, when traveling abroad.
But it is interesting that Accor is taking a leap of faith in giving exclusive rights to a partner it has never worked with before — big though Sunmei may be — to develop a brand that is relatively an unknown in China, and under a franchise model for the first time.
This is also Sunmei’s first partnership with a global chain, Gary Rosen, CEO of Accor Greater China, confirmed.
In a press release announcing its name change from Sunmei Group to Sunmei Digital Intelligence Technology Group on July 13, Sunmei said it is the fifth biggest hotel group in China with 5,800 hotels in third, fourth and fifth-tier cities.
The company said its focus is on building “intelligent hotels” to provide customers with a better accommodation experience. Towards this end, it has strategic separate cooperations with Tuya, Meituan and Tencent Cloud to “redefine a new generation of smart hotels” through the use of technology and cloud-based solutions, it said.
Strategy Shift
Piggy-backing on such an expansive group, and leveraging Sunmei’s existing network and local knowledge, will “certainly enable Movenpick to step out of the shadows like a debutante in a coming-out party, with Sunmei as the trusted chaperone,” said Darryl Agon, managing director of Hong Kong-based Agon Hotels & Resorts. The company, which is an end-to-end solutions provider to hotels, has years of experience in the mainland.
Agon recalled that during the China hotel boom in the early 2000s, Movenpick had been more reserved in China compared with competitors that were “powered by beefed-up development teams, aggressive business terms and proactive brand exercises.”
“Working with Sunmei is a massive shift in the brand strategy by Accor,” said Agon.
But, there are risks.
“Barring a clear understanding of and commitment to the brand’s integrity, brand dilution is the clearest threat. Over-zealousness in signing deals and overheated expansion, where proper execution cannot keep pace, could render the brand unrecognizable from city to city if the fundamental ethos are compromised,” he said.
Chinese-oriented Movenpick
Movenpick by Accor – as the brand is called in China unlike just Movenpick elsewhere — will remain a premium brand as Movenpick is internationally, said Gary Rosen, CEO of Accor Greater China.
“Movenpick is a brand that is quite appealing in China given the Swiss heritage,” Rosen maintained. “We are enthusiastic about the Movenpick brand in China. The brand epitomizes Swiss hospitality, service and aesthetics.”
But it’s doubtful if a Chinese-oriented Movenpick by Accor can follow that script. Accor’s brand description of Movenpick puts ‘Food & Drink’ as the heart of the brand, as well as ‘Heartfelt Service’ and ‘Mindful Sustainability.’
Accor’s media release on the collaboration is careful to say that the Movenpick franchised model in China will be all that, but “tailored to the interests, tastes, culture, and preferences of Chinese guests.”
Sunmei’s aspiration to create intelligent hotels is also a pillar of the Chinese prototype. Accor gave examples such as advanced room selection and booking, facial recognition for quick check-in and security access to rooms, and customized controls for energy efficiency.
In the lobby of each hotel, a vibrant My Movenpick Marketplace concept will serve as a place for social encounters, dining, working, learning or relaxing, for both guests and locals, Accor said. Guests will be encouraged to explore the neighborhood with personalized recommendations for nearby entertainment, events, restaurants, and others.
A new playbook for Movenpick by Accor in China can be expected. That may turn out to be just what the good old brand needs. Who knows what new insights the partnership could bring on developing smart hotels, or on catering to Chinese domestic travelers.
That depends on how well Accor and Sunmei will get along. An outcome will be seen in 2023, when the first Movenpick by Accor opens in Qingdao, in eastern Shandong Province, coinciding with Movenpick’s 75th anniversary.
As for franchising Movenpick in the rest of Asia, Andrew Langdon, Accor’s senior vice president development South-east Asia, Japan and Korea, said, “There is no plan to franchise Movenpick in Asia outside of China; there is no need.”