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Accorhotel's Digital Transformation - Edited
Accorhotel's Digital Transformation - Edited
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ACCORHOTELS’ DIGITAL TRANSFORMATION 2
The hospitality industry is rapidly being disrupted by new digital giants who have
entered the industry and challenge the conventional hospitality approach. To safeguard their
market share and maximize their revenues against a thirty-billion tech driven organization
(Airbnb) and other disruptive business models, Europe’s leading hotel group, AccorHotels
roped in its new Chief Executive Officer Bazin Sebastian to lead their strategical response
transformation that has impacted its value proposition, organizational structure, corporate
culture, as well as its overall business model. The goal is to completely modify the ancient
asset-heavy organization into a contemporary energetic and dynamic player across the fast-
changing hospitality industry, with the ability to successfully compete with the hotel
With the dramatic alteration in the new generation customer’s needs, Jelassi &
Martínez-López (2020) documents that AccorHotels started to go digital via a series of tech-
driven inventions including the roll out of mobile applications and then via a series of
acquisitions and mergers to make their products more reachable and relevant to the
customers. A single application took charge of all the duties associated with the consumer’s
journey, making flexible the consumer’s principle contact with the organizational (Jelassi &
Martínez-López, 2020).
One problem which the company sought to tackle when it decided to create its new
mobile application was that, up until the app’s launch, the facility experience was restricted to
the period a client spent with the organization during a business trip or holiday. In order to
broaden the experience, Bazin Sebastian craved for a service where clients were also engaged
and supported both after and before their visit. With the newly launched AccorHotels mobile
ACCORHOTELS’ DIGITAL TRANSFORMATION 3
application, consumers are able to get an insight of the company’s hotel options- which
includes over six thousand independent and branded locations. Clients can now choose
between luxury, mainstream, cut-price or chic options, with each option accompanied by a
complete city guide, accessible in nine distinct languages to give counsel on shopping,
smart feature permits guests to put in place a complete depiction of their dream experiences,
which are then compiled by the applications’ logarithms to generate an ideal location. Guests
are able to set preference based on various criteria including neighborhood, aesthetics, as well
as ambiance, and then add other factors like family, romance, etc. Unlike its rivals-Airbnb,
AccorHotels stands out in taking an online travel agency approach to the selling of its
fourteen brands. The company has thirty-two localized websites like a Portuguese site, an
Arabic site, etc. and these sale points offer all fourteen of the brands for the three thousand
six hundred hotels conglomerate. Besides offering car and air rental reservations, like the
Airbnb app does, the AccorHotels app will offer local attraction and restaurant information.
The intention is to make the application a travel companion rather than a trip planning
customers (particularly those with minimized mobility) is via its soon to be launched concept
of smart room. Developed in conjunction with designer Versavel Didier, AccorHotels’ smart
room will greatly boast its luxurious and innovative features. Connected tablets will permit
customers adjust music and light, adjust the beds’ headboard, close the curtains, as well as
manage the audio-visual features. Wearable technology with the ability to sense brain energy
developed in the form of a headband will be availed to guests in attempts to help them
concentrate or relax. The rooms will also have customizable scent devices fitted to make sure
customers wake up to tantalizing aromas like sea air, tea or coffee. As noted by AccorHotels
ACCORHOTELS’ DIGITAL TRANSFORMATION 4
CEO, Bazin, with such rooms technology, the objective is to influence and impel the
hospitality industry by bringing into light new approaches to the traditional rooms, which are
Switching gears, hospitality giants are showing a spiked interest in the luxury rental
market. It’s no secret that AccorHotels and Airbnb are expanding at an astonishing speed.
That is because both organizations are constantly on the radar for growth opportunities. More
recently, the luxury rental industry has attracted the two giant’s attention, leading to two
mind-blowing acquisitions. The motivation for Airbnb’s 300 million dollars acquisition of
luxury retreats, a high-end vacation rental firm based in Montreal is crystal clear; the
company is looking for chances to scale. This includes widening its target customers to
include higher-paying clients. The organization does so hoping that clients willing to pay for
glossy villas will with no doubt be willing to pay a couple more dollars from Airbnb’s luxury
tourism service. To retaliate, AccorHotels has also joined the luxury vacation rental market.
The hospitality giants are now currently in negotiations to acquire Travel keys. AccorHotels
CEO, is open about his reasons for the acquisition of luxury rental companies. Like Airbnb,
AccorHotels’s goal is also linked to scalability- to become the leading private rental player
across the globe. Bazin’s objective seems reasonable, given the enthusiasm with which
It is without doubt that the new trend od shared market has rattled numerous
businesses, more so in the travel and hospitality industry. Airbnb and AccorHotels target
same consumers, however, they differ significantly in terms of products and service
offerings. Are the two giants truly competitors? Both Gremillion-Airbnb’s CEO and Bazin-
AccorHotels’ CEO unmistakably agree that no, they aren’t. In fact, they hold that both
ACCORHOTELS’ DIGITAL TRANSFORMATION 5
entities complement each other as is seen by the market situation in France. Airbnb owns
exceptionally well. Sebastian Bazin argues that as long as users of Airbnb remain steadfast
and true to their initial purpose and concept and don’t employ the platform for industrial or
commercial purposes, AccorHotels will adapt itself to the rapidly changing landscape where
One area that is fundamentally distinct between these two organizations is their cost
of capital. According to Loonam et al. (2018), capital markets value Airbnb company based
on clicks and number of travelers whereas AccorHotels is valued based on its income and
though the tech giant does not possess any actual estate. This unfair playing filed presents.
transactions between the customers and the host. On the other hand, AccorHotels is a
traditional provider of hotel services that targets consumers from economic, mid and luxury
a tech company attempting to improve its hotel services. Airbnb is a tech-company at its core,
and therefore files income taxes. Hospitality firms such as AccorHotels on the other hand pay
corporate taxes.
product building however since 2005, the industry has undergone rapid alterations with firms
such as Orbitz and Expedia entering the industry, replacing distribution channels and in turn
eroding profit margins. Sebastian Bazin agrees that the hospitality industry didn’t react fats
enough to these changes and now Airbnb introduces a new threat to the prevailing and
ACCORHOTELS’ DIGITAL TRANSFORMATION 6
existing model in the hospitality sector by taking advantage of the collaborative consumption
(Mody, 2017). There’s nothing left for AccorHotels to do but to seize being a spectator and
become one of the actors. According to studies, Airbnb is a company that is much focused on
design, for instance by spending lots of dollars and sending photographers to take images of
upward of 50 percent of locations in main cities. The company unlike AccorHotels is more
dynamic, lighter, reactive and takes great advantage of its ability to quickly move and create
a buzz.
As with every organizational model both Accor’s and Airbnb business models have
their strengths as well as weaknesses. One of the biggest strengths of AccorHotels’ business
model is its segmentation strategy. As documented by Lowe & Howells (2018), segmentation
in the hospitality market most of the time encompasses a jumble of demographic and
upscale, midscale, luxury and economy (Demirçiftçi & Kizilirmak, 2016). AccorHotels
functions in all these segments, ensureing that each customer is able to afford a hotel based
on their price ranges. In addition to market segmentation, the company’s wide spread across
the world is advantageous. Based on business analysis reports, the company has over 4,500
hotels, residences and resorts across one-hundred nations. Other strengths include but not
limited to the company’s tracking and database systems of the clients, and their ability to
offer good features such as loyalty programs, online check-ins and exclusive guest
executives.
For the business model weaknesses, although AccorHotels has made significant steps
in integrating technology in the backend process, the company has not been able to harness
the power of modern tech in the front-end processes. This has in turn seen the hotel giants
ACCORHOTELS’ DIGITAL TRANSFORMATION 7
lose its business to tech companies like Airbnb. Furthermore, although franchising has aided
the hotel chain in cutting its cost to a large extent, the service levels, particularly in their
luxury hotels such as Fairmont, Sofitel, and Novotel have suffered a great blow because of
On the other hand, Airbnb is globally recognized as the cheaper alternative to hotels.
The company has a first mover advantage in peer-to-peer lodging industry. This advantage
has played a vital role for the firm in terms of creating a strong and prominent brand
paramount piece of the success of Airbnb business model is an easy premise: disappointment
equals expectation minus reality. To manage the consumer’s expectations, the company
ensures that each of the listing offers an error-free portrayal of the type of experiences and
amenities customers would encounter, by recording the advantages and the potential negative
features of the accommodation. Airbnb firmly believes that clear-cut and high-quality images
tend to have a significant difference, and therefore professional and quality photograph
services are offered in numerous cities at little to no charge. Total transparency is what fuels
the consumers and ensures high rates of satisfaction. Throughout the while process, guests
and host find social media connections and reviews to help establish trust. Using the online
reputation system developed by Airbnb, both guests and hosts provide feedback and reviews
with customers rating the accommodations’ features like convenience, cleanliness, location,
etc. Beyond providing platforms to locate accommodation, Airbnb offers its clients a genuine
experience, an easier way of discovering out how it feels to live amongst locals. Offering a
pocket-friendly prices, Airbnb rooms do not require 24-hour check in desks, administration
business model is not without its hiccups. At the top of the list, as a result of its business
model, the company is unable to control the quality of adventure services, experiences, and
Mody (2017), the company can only encourage host to offer quality services to customers. If
host fail to offer quality accommodation, they get negative reviews and low scores from
clients making it hard for them to land new guests. Such a control system sounds perfect,
however, the lack of tools the company may use in ensuring high quality services proactively
remains among the major weaknesses of the business models. Furthermore, the company’s
brand image is highly vulnerable to scandals. In numerous cases, the causes of scandals are
outside the company’s control. Other weakness includes disturbances, property damages, and
References
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Demirçiftçi, T., & KIZILIRMAK, İ. (2016). Strategic branding in hospitality: Case of Accor
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