• Accor flies nest

AccorHotels has launched a temporary hotel concept using shipping containers, called Flying Nest.

The brand, designed to meet extra capacity needs at events and during busy periods, was launched just over six months after Snoozebox went into administration.

Accor said that the concept had been tested at various cultural, sporting and artistic events throughout France. Sébastien Dupic, new business senior project manager, AccorHotels, said: “Originally developed for a B-to-B clientele – event organising agencies, exhibition organisers, festivals, events, corporate clients, AccorHotels partners – the Flying Nest concept could also be offered to a B-to-C target in 2019.”

The product uses converted marine containers, which are then put into ‘islands; of six modules clad with raw and natural materials and featuring a private bathroom, air-conditioned living area and

Wi-Fi. The modules of six containers provide five rooms and one “technical room”. Each island takes half a day to assemble.

“The layout of the islands, the patio and the large windows connecting the inside of each room to the outside all provide guests with a totally immersive accommodation option at the heart of the experience”, said Damien Perrot, SVP, design at AccorHotels.

The company said that, through the Flying Nest project, AccorHotels was “reaffirming its commitment to serving its customers at all levels, including at cultural, sporting and entertainment events”.

November saw Snoozebox, which also provided mobile, container-based hotel rooms, go into administration. The company, founded by Robert Breare in 2011, went through a number of incarnations, including local authority housing.

Snoozebox said: “The significant debt burden taken on by the company in 2014 has been one of the largest challenges given the poor financial and operational position of the company when the directors commenced restructuring in early 2016.”

The group initiated discussions with its primary lender in April 2016 seeking an amendment to its debt servicing obligations and in November of that year announced amendments to its debt servicing obligations before agreeing a debt capital and interest repayment holiday.

The group’s most-recent contract prior to the announcement was in August 2017, providing workforce accommodation in “a remote area of the UK” for an initial period of 12 months.

Chris Errington, chairman, Snoozebox, commented at the time: “I am delighted to announce this workforce accommodation win.  We will be providing 80 high-quality en-suite rooms configured as temporary accommodation in a remote area of the UK that will serve as a base for the customer’s workforce.  The hotel will be deployed within a short two-week period demonstrating just how rapidly we can respond to demands for such accommodation.”

In the half-year to 30 June, the company reported a £400,000 adjusted Ebitda loss, with revenue of GBP900,000, down from GBP2.2m in the same period last year. Net debt at that point was GBP6.7m, up from GBP5.5m at the end of the first half of 2016.

The group had increasingly focused on its semi-permanent operation, which has seen it work with local authorities on easing housing shortages and looking at overseas building sites. It described the events-driven business which it launched with as suffering from historically low margin. Snoozebox said that semi-permanent revenues were the primary driver for the group and, that, due to the relatively weak pipeline, it expected revenues to decline for the remainder of 2016 unless new customers were secured.

Other strategies attempted by the group included providing its modular accommodation product to Ealing Council for social housing. At the time the company split its business between Hotelz – which saw rooms committed on a semi-permanent basis – and Eventz, which was event-driven.

At the end of 2015 it signed an agreement with the Dutco Group, looking at events such as Dubai Expo 2020 and World Cup Qatar 2022, in addition to the continuing high levels of infrastructure investment in the region. At the time it was described to us as “more of a marketing partnership to help secure events” and not something the company was investing its own resources into.

HA Perspective [by Katherine Doggrell]: Snoozebox rightly identified pop-up hotel rooms as a massive opportunity but, distracted by debt and the need to service it, lost sight of the original concept as it looked to every other possible deployment of a room possible. AccorHotels has no such issues.

One could also see this as another Airbnb play. The platform made a big push into the UK with the 2012 Olympics, sucking up guests who were eager not to pay into the hands of the hotels who were looking forward to their own pile of gold during the festivities. The Rio Olympics saw Airbnb named “the official alternative accommodation services supplier” for the event. It makes sense for AccorHotels to scoop up this extra revenue without having to go to the effort of building a whole hotel and without the risk of seeing its guests tempted into the ways of the sharing economy.

Although AccorHotels makes such of its distributive scope, events-based rooms are not an area where it is as relevant. The event itself drives occupancy, much as an airport hotel would. Where AccorHotels has the edge will be through its loyalty programme, where guests are more likely to stay if they can earn points – and you can probably toss some brand reassurance in there for good measure.

Done right, this should be like shooting fish in a container.

Additional comment [by Andrew Sangster]: Pop-up hotels look like a viable business model until you get into the weeds of the economics. For a one-off event, the costs of installation mean that room rates need to be sky-high to make sense.

This means that for, say, a Glastonbury, where millionaire generation Xers want to relive their youth in comfort, paying thousands for a few nights is feasible. It is the same logic that sees people spend thousands on first-class air travel.

Thus it is possible to imagine a market for these pop-ups if enough event organisers play ball. But the incentive for event organisers is to drive a hard bargain when they can access trendy yurts or posh tents to do a similar job, and pocket the extra profits themselves.

If your pop-up is off-site, it begins to look a lot less like first-class travel and the willingness to pay will decline as a result. In other words, the supplier is entirely in the grip of people who have the main customer relationship: the event organisers.

So rather than conventional hotels, this is much more like contract catering or aircrew accommodation. The business-to-business relationship is everything. It can work, but it is a business Accor stepped away from more than 20 years ago when it sold Generale de Restauration in 1995.

Interestingly, however, Accor appears to be rebuilding that hospitality conglomerate structure. This year it has bought the restaurant reservation platform ResDiary and in June it bought Adoria a software platform for catering and contract catering. Last year Accor pursued stakes in events and catering companies Noctis and Potel & Chablot.

Putting all these bits together seems to make strategic sense. But there is a real sense of Back to the Future about it. I seem to recall a British hospitality conglomerate called Forte, whatever happened to that?

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