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  The future of accommodation: is a healthy hotel sector necessary to ensure a warm welcome in resorts? The case of Avoriaz

Stéphane LERENDU - Director of the Avoriaz Tourist Office, France

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Introduction

The opening of the resort of Avoriaz was epitomized by the opening of the Hotel des Drômonts on Christmas 1966. This would be the resort's lone hotel--its greatest paradox.

The resort was constructed gradually between 1966 and 1996.

Today, the resort has 16,450 beds, distributed as follows:

• Rental beds: 10,238 (61.4 %)
• Non-rental beds: 6,428 (38.6 %)

Rental beds break down as follows:

• Tourism residences: 7,292
• Property agencies: 2,289
• Club Med: 573
• Hotels: 84

Paul Dubrule, President of the Maison de la France--in his piece published last June, "Tourism in France: The Issues for 2020"--laments the loss of hotels, since they are essential to the diversity of our offer.

This reasoning entirely applies to the scale of a resort.

My contribution today is to show how a resort can function without the hotel sector.

In 2006, we will celebrate the 40th anniversary of a resort that is doing quite well.

For the resort's rental beds, which produce 82% of the stays, the occupancy rate is 78.4% in the winter season, generating 1,115,000 overnight stays, or 186,000 stays.

I would like to express my remarks in two sections:

• Accommodation in harmony with the concept of the resort
• The product's appropriateness for the demands of the market

1 - Accommodation in harmony with the concept of the resort

• The factor triggering a stay in Avoriaz is, and will remain, the concept of the resort even above the type of accommodation. Wholly pedestrian since its beginning, Avoriaz entices through the exoticism it brings vacationers, who enter directly into what some like to call the "mountain imagination": snow that stays white, the jingling of horses' bells, 100% of the residences with skiing at their doorstep (98% of our guests are skiers)...
  The paradox there is also historical: the resort built its fame on the Fantastic Film Festival that, between 1973 and 1993, brought everyone from cinema and the media together for one week a year. One of the strongest repercussions of the event was how it anchored in the public's mind a top-of-the-line image of the resort, with luxury hotels--out of step with the product.
  The resort's communication plan has for the past few years resolutely aimed at refocusing views on the resort's fundamental values, which are indisputably modern and in harmony with today's modes of consumption. Our approach consists in giving some content to this unsolicited fame, as Avoriaz is associated with modernity and innovation, in particular in the area of boardsports, and with integration of the environment.

I will add that the resort's welcoming procedures are part of the concept of Avoriaz itself. In order for guests to pass immediately from the status of motorist to that of an inhabitant of Avoriaz, there exists an arrival procedure and an exacting level of service: from the unloading of luggage, to ordering a hot chocolate and a sweet, to taking a sleigh-taxi, to handing over keys.

• A dominant operator for a standard product: Pierre et Vacances operates nearly 70% of the rental beds. They market using the two brands Pierre et Vacances and Maeva.

Without elaborating, I wish to point out that with this operator one encounters the benefit of a consistent product for the guests, who will find the same standard of apartment whatever their residence. The Pierre et Vacances guest in Avoriaz is a loyal one (a recent study showed that Avoriaz guests are very loyal).

I should add that Avoriaz benefits on two accounts from all of Pierre et Vacances's sales power: this is the operator's largest supply in the mountains, and Gérard Brémond, President of Pierre et Vacances, is the creator of the resort.

One of the difficulties we have to manage is harmonising standards with the scale of the resort. Pierre et Vacances establishes its levels of comfort with suns; one agency with charm categories (category 1 and 2); and yet another with silver and gold categories...
One hotel still communicates using the stars that correspond to tourism rankings; furnished rooms and tourism residences are freeing themselves from them. All of this is difficult for guests to interpret.

• An offer appropriate to the needed variety in clientele: The resorts that function best are those with a great variety in their clientele. In fact, it is no longer permissible to believe resorts that declare themselves as family-oriented in their marketing plan, since the difference in a season's sales is made over non-school holiday periods.

  The tourism residence product enables us to respond to the expectations of different types of guests:

  • To families for whom the hotel is not necessarily appropriate for putting up a family of four, especially if they have two young children. The resort has innovated in this niche in welcoming children (Annie Famose Village, package pricing policy, daycare for children over 3 months...)
  • To holidays among friends, who can meet in a setting fit for sharing unforgettable moments...
  • To groups who wish their members to be welcomed under equal conditions and within proximity to each other. A group can entail individuals grouped together by a tourism operator, seminars or conventions, corporations, federations, even students...

This variety is the subject of a sustained yield management project, which provides guidance according to marketing objectives.

To illustrate this remark, let me point out that the annual report of the Comète research institute on the ANEM network's mountain resorts lists an overall rise of +2.2% in the guest occupancy of tourism residences and a drop of -4.1% in the guest occupancy of hotels over last winter.

The product makes it possible to promote the contents of a diversified offer according to different periods, and to optimise the occupancy rate over a given period.

• Relative control over the proportion of cold beds:
  The risk for a resort composed primarily of residences is the uncontrolled increase of second homes that come out of the rental market.
  In the '70s, a large number of apartments was bought by residents of the region, and initially constituted a supply of beds that were not placed on the rental market.
  Pierre et Vacances' 9-year lease plan allows a certain stability in the supply of rental beds; at the end of the first nine years, the renewal rate for the leases is 70% on average. The leases that are not renewed will for the most part be re-directed towards property agencies in order to satisfy a demand for management flexibility.

In terms of probability, the risk is perhaps greater of seeing hotels in so-called "hotel resorts" disappear.

2 - The product's appropriateness for the demands of the market

• Reorganisation of apartments:
  The resort's residences were built between 1966 and 1996 according to a typology of apartments based more on real estate logic than on operational logic, with types that today are not found on the market.
  In fact, the studio is a product belonging to the past, although it still represents 11.4% of apartments.

In 2002, a significant renovation and expansion project was begun, partly due to incentives from property agencies that don't accept uncomfortable apartments for their stock; but especially due to Pierre et Vacances, who is benefiting from favourable conditions. Complete residences have been sold to single owners (financial holding groups) who have entered into this project without difficulty; this is much easier than trying to convince the 50 or 100 owners of a single residence. Since 2002, Pierre et Vacances has reorganised 1,800 beds, and on average has made two apartments out of three old ones.
Owners placing their apartments with agencies have been doing the same thing, often buying neighbouring apartments. The average sale price per apartment has increased, although the supply has diminished by about 800 beds across the entire resort.

Now the resort has mostly 2-room, 4-5 person apartments (66.87%), and those for 6 or more people (12%).

The reduction in the number of guests has been exaggerated by the phenomenon of apartments being occupied below capacity: frequently a 2-room, 4-5 person apartment is occupied by 2-3 people who desire more space. The resort's shopkeepers who work not with lodging units but with individual people suffer from the loss of beds.

• Hotel-like service in tourism residences:
  Consequently, there is an ambition to work on a policy increasing the value of the offer, rather than on cutting prices.

Each year, services in the residences improve in order to provide comfort to guests during their stay: bath linens, beds made upon arrival, housekeeping, tray meals for the first night, pre-booking of breakfasts and dinners, pre-booking of activities, 24-hour reception, and so forth. Efforts are also being made to make welcoming procedures easier: children's activities every Saturday in reception, handing over keys starting at 3pm (rather than 5pm), experimentation next winter with SMS messaging to notify guests that their apartments are ready, etc.
Nevertheless, it is difficult for guests accustomed to staying at a hotel to interpret and understand the offer of hotel-like services. These services are considered more as an improvement of services offered to guests who are already won over, rather than as elements of competition on the hotel market.

For us, as well, providing new services is one element that must contribute value to the price of the rental. Prices increase in a world where a competitive benchmark (exaggerated by e-commerce), known to all, exists. A few years ago, a direct customer did not know how much a customer of a tourism operator was paying for the neighbouring apartment: now, the price benchmark is known to all customers.
As a result, it is important for us to provide service and quality in the welcome.

• Appropriateness for new forms of holidays:
  Avoriaz is the resort nearest the Geneva airport, a third of whose traffic comes from easyjet routes. The responsiveness of the Pierre et Vacances Group's reservation scheduling is not as effective as a hotel's. The marketing of short stays has had a lengthy development: first exclusively sold on-site directly, they have only this year started to appear in catalogues. Nevertheless, demand for short stays is growing stronger.

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