Accor Hotels Digital

Transformation

GROUP 5

ADITYA YADAV PGP/25/373 adityay25@iimk.ac.in

ASTHA SALECHA PGP/25/381 asthas25@iimk.ac.in
M V ROOPA DATTA PGP/25/398 roopad25@iimk.ac.in
RAHUL MALHOTRA PGP/25/410 rahulm25@iimk.ac.in
SWATI PGP/25/423 swati25@iimk.ac.in
 How different are Accor Hotels' and
Airbnb's value proposition?
Accor Hotels is a hospitality company that owns, manages and franchises hotels, resorts and vacation
properties worldwide whereas Airbnb provides online platforms for hosts to accommodate guests with
lodging and tourism related activities. The company does not own any real estate listings, nor does it
hosts events; it acts as a broker, receiving commissions from each booking.

Accor Hotels envisioned a company-wide digital transformation by leading digital hospitality through
sophisticated technology incorporation and developing a customer-centric business model; aimed to
provide guests with a seamless journey through the entire travel experience. Airbnb's value proposition
is twofold - to hosts and guests. It is a multisided platform that facilitates a trusted community
marketplace for people to list, discover and book unique accommodations around the world.

Airbnb has implemented strong marketing efforts to reach customers by enabling full transparency
backed by a sophisticated online reputation system to ensure high satisfaction rates. By offering high-
quality pictures of the accommodation, the company further reinforced accurate portrayal of the
potential stay experience for its guests.

Thus, Airbnb's value proposition enabled the company to capture the shift in customer sentiment and
usher in a new trendy movement that defined a new lifestyle. Fueled by a sharing economy mindset that
offered a cheaper alternative and focused on high customer satisfaction, the company enjoyed high
levels of loyalty. Accor Hotels through its renovated plan aims to convince customers to turn to them
over their competitors.
What are the strengths and weaknesses
of the two business models?

ACCOR HOTELS

Strengths
Strong foothold in the hospitality industry; over 50 years worth of
experience.
Invested heavily in extra amenities they competed for all segments in
travelers; offered attractive amenities like pools, gyms, spas, fine dining, etc.
Weaknesses
Higher average daily rate as compared to digital disruptors like Airbnb
that offered a rate that was 18.8% lower than that of a traditional hotel
room causing AccorHotels to lose out on a significant customer
segment

A strong brand portfolio that allowed for a greater degree of ownership in
its acquisitions.
Well-established online booking platform; extended the digital accessibility
through a unified mobile application, Mobile First, facilitating increase in
user traffic.
Recognized the potential of its customer data and leveraged its customer
database to establish "Voice of Guests" using which the company planned
to offer tailored services to its customers.
Higher cost to customers as hotels were subject to additional taxes such
as occupancy and sales tax that companies like Airbnb were exempt
from.
Important operational value: total cost percentage of revenue in 2015 is
eighty-fifth, while BNBs’ is 82%; wages accounted for twenty-sixth, that
is third-dimensional above B&Bs
What are the strengths and weaknesses
of the two business models?

AIRBNB

Strengths Weaknesses
Airbnb connects hosts and travelers and facilitates the method of dealings while
not owning any rooms itself; whereas giant hotels and bed & breakfast were
subject to town, state, and federal rules

Doesn't have insurance to cover paying guests

Handily booking actions through a booking platform wherever services square
measure offered and demands square measure met, permitting house owners
Depends heavily on the standard that the hosts deliver
to list their area on the platform and earn rental cash.

Violate partition laws and laws require hosts to pay edifice taxes
Facilitates the method of booking lebensraum for travelers, offering low-cost
choices to travelers to stay- Smaller disbursement than edifice, motels, and
The security and security of hosts and guests square measure tough to manage.
B&Bs: no operational real-estate property value since it has already been paid
Not only the guests however additionally the hosts have a risk of loss: broken
by the hosts.
house, being exposed to liability problems within the instance of an injury or
maybe the death of a guest.
Shopper preference is shifting from that specialize in possession of
sharing/renting.
No barrier of entry for brand spanking new entrant: newcomer could turn out a
similar kind of services with none problem
Dual peer to look rating system keeps the standard of service at a high level,
cutting back the expense for rating and assessing and providing full
transparency

Tax and regulation circumvents: since Airbnb doesn't own any real estate
properties, they don’t have to pay the tax for it
What if nature of similarities and differences in the digital
transformation strategies of Accor & DBS?
Accor
Accor Group, which has been in the hospitality sector for a long
time, has recognised the need for digitization and has decided to
become a technology corporation in order to stay ahead of the
competition.
Accor hotels first introduced an online booking platform, and
then gradually developed a mobile application with the goal of
increasing mobile bookings.
Similarities
Both the Accor group and the DBS bank have adopted a plan to
examine the customer journey and have realised that improving
customer satisfaction is more essential than improving product
and procedure, and this has been their top focus.
The major similar transformation is the development of a mobile
application for customers' convenience.
DBS
In its drive to become Southeast Asia's largest bank, they
worked hard to identify the user's banking pain points and
began working on numerous improvement projects.
They developed a digital banking system and launched a digital
bank mobile application to serve all of their customers in the
Southeast Asian region as part of their digitalization goal.
Differences
In houses developement is done by DBS and acquisition is done
by Accor for digitization
Accor has shadow comex and DBS has made hackathons