Accorhotels Digital Transformation: A Strategic Response To Hospitality Disruptor Airbnb
Introduction: A Strategic Response To Hospitality Disruptor Airbnb
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AccorHotels and Airbnb have become a popular phenomenon attracting an upcoming generation of travelers. The report examines the AccorHotels' digital transformation plan and is built upon the study "AccorHotels Transformation to Digital Transformation and A Strategic Response to the Hospitality Disruptor Airbnb'. However, the digital player's business model was regarded as to be one of the most important trends that have shaken the hospitality industry over the last few years; the established hotels have shown little reaction and to develop a knowledge value propositions of two of these hotels is described. The report features Original critical thinking that is based on exceptional insight, expertise and comprehension of the information. Finally, the strengths and weaknesses of each firm are revealed through extensive research that shows the range and depth of information available.
Overview
AccorHotels
According to Forbes, (2022) Accor is a hotel operator company that manages and also franchises upscale, midscale, luxury, and economy hotels. The Company operates hotels under several brand names like Sofitel, Raffles, Fairmont, Swissotel, Pullman, Adagio, Mgallery, Grand Mercure, Novotel Suites, Ibis, Ibis Styles, Hotelf1, Ibis Budgets, and many more. The group is involved in assets portfolio management work, construction, hotel design, maintenance activities, and renovations. The company operates in around 5298 locations across 110 countries which include Europe, the Middle East, America, and Asia-pacific. The company has 260,00 employees working all across the world in every branch of the company. The company is operating in various countries, its headquarters are at Issy-Les-Moulineaux, France.
Airbnb
Airbnb is an online marketplace that is working in connecting people who are interested in renting out their home with other individuals who are travelers or look for rent. The company was established in 2007 when the owner of the business came up with the idea of appealing people as paying guests to sleep on an air mattress in a living room. According to Airbnb (2022), the company has 6 million listings cover more than 100,00 cities and towns, and the company is spread over around 220+ countries across the world. The company earns its revenue by charging service fees on each booking. It is quite cheaper than hotels and hostel facilities.
Critically evaluation of Accor Hotel’s digital strategy and effective competition against Airbnb
Back in October 2014 the popular hotel company Accor Hotels launched a 5 years digital transformational plan which was called Leading Digital Hospitality, in which the company spent around 225 million euros were allocated which was one of the biggest AccorHotels investments. The company made a digital revolution arrangement covering from 2014 to 2018, which was established on three structure blocks as cited by Damnjanovi?, Lon?ari?, and Dla?i?, (2020).
The first one is a common mobile app for every hotel, the second one is customer focus, and the last is the various tools for streamlining the customers' experience. The company hired more than 100 experts for helping them with the digital transformation plan of the company. the company's online booking platform known as 7 AccorHotel.com is very well established with around 329 million visits per year. The online booking platform of the company is available in around 28 languages; this stage was not available for all the AccorHotels brands and its independent hotels (as cited Jelassi, and Martínez-López, 2020). Accor's hotel's sales are booked by the online platform which is estimated to be around 1/3 of total sales and around 12% of the booking was done via mobile. In the year 2015, the company launch a portable application known as Mobile First which was universal to all Accor Hotels, in which the main objective of the company is to increase its mobile booking up to 35% within 5 years with which part of its bookings to be made from mobile. According to Lenoel, (2020) the company plan for the year 2016 was reaching increased up to 40% in mobile application usage. The main objective of the company which was introduced by the CEO of the company was to focus more on its customers. The CEO of AccorHotels states that the only thing which matters for the company is the customers. For many years company had it all wrong in that the company was product and brand-centric. The company was not listening to its customer's wants, why they were preferring Airbnb, and also why they were attracted to other brands. Mr. Bazin the CEO of AccorHotels believed that the retention of the customer was controlled by experience and that the hotel stay makes memorable for their customers. The main factor which influenced the customer’s experience is the interaction they had with the hotel and also the usage of the information collected as feedback from their customer for improving their abilities. The company has developed a model of customer experience which describes the whole travel experience of their customers. This model has seven steps which are
The dream
The assortment
The booking
Scheduling and trip
Traveling and stay at the hotel
Sharing the feedback
The last is loyalty
The group’s purpose for this model was to represent the entire trip and also focus on increasing the presence before and after (as cited Badrinath, 2015).
The other way opted by the company to turn into customer-centric was to influence its record of customers through a mission called the voice of the Guests. According to Mr. Bazin, their company and also other companies have customers' data but are unable to use the data properly, so the main purpose of Voice of the Guests is to facilitate the AccorHotels to dig out the data and in sequence since its customer's database and use it in a proper way for each of its customers. The company also has various tools which were introduced for the improvement of customers' experience at each step to make sure that the customers have a seamless journey with one-click booking facilities, easy paperless payments, and the online check-in. This plan also involves an e-membership card which was for its loyalty program known as Le Club AccorHotels. This program of the company covers all the brands of every country and in the year 2017, it has around 25 million members.
According to Nowak, (2018) the focus to speed up the digital transformation of the company acquired a web and mobile platform called WI polo, which manages trip itineraries, and connects those to Twitter and Facebook. After that the company also acquired Fast booking, the leader of France in digital marketing of the Hotel industry, it serve more than 3500 hotels in Europe, and Asia with help of a website, digital marketing campaigns, business intellect software, and channel managers.
An integrated plan
The plan comprises four customer-centric programs which focus on the improvement of the knowledge regarding customers, the welcome, and the services which are provided to them. These will further help Accor to upsurge its customer database and enhance loyalty.
Customer Centric - helps in developing and making optimal usage of customer’s databases to make sure that it is personalized according to the needs of customers and provides suitable services. It will also centralize feedback on a company’s platform called theVoice of the Guests.
Mobile First - this option focuses on customers' movement to mobile, like smartphones and tablets, by the help of a single mobile application customers can incorporate every Accor's services before booking, during their stay, and after leaving the hotel.
Mice & BtoB – this program develops an innovative and creative digital solution for all businesses, which includes online booking for business seminar services and it will also help in increasing the incorporation of B to B services in the international booking website of the company which is accorhotels.com.
Seamless journey – it will make sure that the customers have a seamless transaction at every stage of their travel from their experience, e-payments, one-click bookings, check-in, and the Le Club Facilities of AccorHotels virtual card as cited Dubois, Chae, Niessing, and Wee, (2018).
The difference in Accor Hotels and Airbnb’s value propositions
The value propositions of Accor and Airbnb are very different from each other but the Accor recently has made some important changes in its model which results quite similar to Airbnb. Both companies have expanded their services into the same market of hospitality and also diversified their services in a similar proposition. Airbnb is a company based on shared accommodation and also deals in providing guests with the facility of a local travel experience. The company does not have its real state facility but acts as a broker on the other hand AccorHotels is more into the traditional business of a hotel chain. According to Camelia, Ioana-Valentina-Alexandra,and Larisa-Andreea, (2019) the company owns and manages its own properties worldwide and focuses on a direct approaching in operating its owned hotels as opposed to its competitors other than Airbnb which all operated from a franchising model.
Accor was facing huge competition from two groups of competitorsthe first one was the regular competitors like Hilton, Hyatt, and Marriot and the second group is of the new competitors in the new economy which was Airbnb. In this situation, Airbnb decided to focus on innovation to compete with digitalization and transferred their whole business. As an outcome of which the company is opening 1 hotel every 29 hours and they are not the only chain of hotels. They have transformed their business model which conduces to the changes of the holdings and they also did a detailed transformation in changing the path to digitalization as cited Dominique Vidalon, (2016). The company has used Bain's 360 methodologies for producing a wave of digitalization and innovation.
The strengths and weaknesses of both company’s business models
Strengths of Accor and Airbnb
Accor has a very amusing portfolio of luxury hotels, budget hotels, and also mid-scale hotels for every category of its customers. The company has several prominences all across the world and a well-established and popular brand name. Accor owns all its properties and has a physical presence (as cited by Demirçiftçiand Kizilirmak, 2016). On the other hand, Airbnb has the advantage of first mover as it is part of a shared accommodation industry. They do not own any property as they do not own any kind of assets and because of that, the company enjoys low operating costs and significant profits. Airbnb has established a trend for the millennials by offering them a reliable experience of living life locally or experience like home for customers. The company has a very good feedback and review system for making sure that customer experience satisfaction and also a strong online presence which makes the whole process seamless for the customer as well as the company (as cited by Syne, 2018).
Weaknesses of Accor and Airbnb
Accor in starting has a very traditional business hotel chain model in which the company has invested lots of its money in assets and because of this operating costs of the company were higher than other competitors which were dealing with an online platform like Airbnb as cited by Marcus Galenius Limahelu, 2017. It immediately adopted the changes in the economy and updates itself to digitalization by adapting technological advancement and also worked on control of its costs and profits. On the other hand, Airbnb was facing issues with poor host facilities. Airbnb faces problems arising from laws and regulation violations in housing. As in a hotel, people do not have any control or regulation but in the case of the house, the guests were expected to follow the rules and regulations of the owner. It is the biggest drawback for Airbnb as people do not like such behavior.
Conclusion
The report concluded the challenges the AccorHotels faced in fast changing market which was going towards digitalisation. The company is able to recognize the potential threats the changing economy was representing for the hotel industry. Earlier the company believed that it did not react to the changes which were required for retain in the competition. The biggest digital competitor of AccorHotels is Airbnb which is a fully digitalised company operating on online platform which is very convenient for its customers. However, the company has started to focus on its weakness and worked in the model which customer centric. The model focuses on increasing customers satisfaction and putting their needs and convenience at top priorities and it also includes the usage of mobile application of company.
Reference
Airbnb. (2022). Overview. About Airbnb. (online).
Badrinath, V. (2015). Tourism’s prospects. The hotel group ACCOR faces worldwide competition: A successful digital transformation. In Annales des Mines-Realitesindustrielles (Vol. 2015, No. 3, pp. 68-73). FFE.
Camelia, G., Ioana-Valentina-Alexandra, M., & Larisa-Andreea, N. (2019). Organizational culture: A case study of the impact of ethical organizational culture on the efficiency of Accor Hotels. Romanian Economic and Business Review, 14(2), 86-96.
Damnjanovi?, V., Lon?ari?, D., &Dla?i?, J. (2020). TEACHING CASE STUDY: Digital marketing strategy of Accor Hotels: shaping the future of hospitality. Tourism and hospitality management, 26(1), 233-244.
Demirçiftçi, T., & KIZILIRMAK, ?. (2016). Strategic branding in hospitality: Case of Accor Hotels. Journal of Tourismology, 2(1), 50-64.
Dominique Vidalon. (2016). AccorHotels buys concierge group to counter Airbnb challenge. (online).
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