ACCORHOTEL

DIGITAL
TRANSFORMATION

BUSINESS MODELS
FOR DIGITAL
ECONOMY CASE
STUDY
SUBMISSION

JANUARY 17

GROUP 8 | SECTION F
ASHISH (318) | KANIKKA (329) | KESHAV (332) |
KRITIKA (333) | PAYAL (342) | VIBHOR (367) |

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1. Answer the following after visiting various hotel booking websites:
a. What are the different type(s) of online content affecting the customer
journey?

The customer journey is the path a customer travels from first point of awareness through a
number of interactions with the brand en-route to conversion and beyond.
There are five stages of customer interaction referred to as” purchasing funnel” which further
identifies the type of content affecting customer journey. The
customer journey is mostly social now with an abundance of
influential online content from every angle of internet. There are
3 major types of online content:

❖ Expert Content: This content is from third party influencer

which is most impactful and influential from start to finish
of customer journey.
Under this category are various review articles, videos,
and blogs on different social media channels online.
Expert content from 3rd party is more credibly appealing to
consumers rather than the brand content.

❖ Brand Content: Now a days all the brands try to have an active social media presence
through websites, Twitter, Instagram and more. This content might not help to attract
new customers but would help the customers to verify information that they get from
experts online or other users so as to engage them and get them into buying cycle.

❖ User Content: User generated content allows consumers to become your brand
ambassadors by sharing their experience of using the product, feedback like reviews
available on Amazon, Facebook, twitter, Instagram etc. This content is generated by the
users itself on various social media platforms and is one of the keys of reputation
management.
Based on the comparison of various hotel websites like OYO, Trivago, Makemytrip, Airbnb,
Expedia, Yatra the online content affecting the customer journey are:
• Loyalty Programs
• Hotel comparison options for example, Trivago
• User or customer feedback on convenience, cleanliness etc.
• Reputation System For example Airbnb
• Mapping for nearby station and destination pictures
• Hotel options, price, facilities, distance which helps user to decide a better option
• Flight booking options
• Advertising services
• Travel related content
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b. What kinds of motives drive people to create online content?

People create online content because of multiple reasons –

❖ To generate awareness/knowledge: Websites generate online content in order to
create awareness among their target audience about important issues (political,
economic, social etc.) which may or may not be tied back to a particular product or
service. Informational websites or open source websites cater to this need and are
usually supported by individuals sharing content.
❖ Social needs: Sharing of personal milestones and memories through social media
addresses the social needs of humans to connect with each other and stay relevant.
❖ Share experiences through online blogs/reviews/videos for empowerment and
otherwise: People generate online content in the form of reviews and ratings so that
they can reach out to people and share their experiences. Also, they do so in order to
gain visibility and express their emotions related to any particular incident or product
which they want people to know. For example, social media content like YouTube
videos about products, online reviews and ratings about any service or product used,
promotional content or videos. Such content also helps empower the community of
users.
❖ To generate income: Online content can help in income generation for different
stakeholders depending on the type of content which is created. For example, based
on number of clicks in terms of websites or views in terms of YouTube. Individuals
might use this medium to generate income on a personal level.
❖ Building relationships: Customers appreciate the helpful information, but more
importantly, they embrace a relationship with the brand. On a personal level, people
initiate conversation for enquiries to get preliminary information from company/brands
on products/services. Conversations can then be published on company websites in
the form of FAQ to address concerns or on platforms such as Quora.

c. What does the typical customer journey look like in the hoteling industry?

The customer is considered the king in the hoteling industry. But it is important to understand
various touch points of the customer journey to provide a memorable experience.
➢ The Awareness Stage: Inspiration for Travel
The starting of a hotel booking is from is the wish or need to travel which is mostly when
one has some work (personal/professional) or gets influenced from online content
(social media). By looking at various pictures on social media the customer might want
to visit the place which is why social media has large influence on travel idea of the
customer and hotel as an industry.
Search Engine, newsletter, Television advertisements and online content are some of
the channels.

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 ➢ Consideration/Research
Stage: Where to go?
Once the decision to travel and
destination is made, the search for
hotel commences. Peer
recommendation and expert
content are most influential in this
phase. Along with this various
social media images, prices and
user generated content become a
part of extensive checklist. The
directory of hotels along with
traveler reviews is a win-win for
customer at this stage.

➢ Booking Stage: The

Purchase Decision
Now the customer either selects
the hotel or rejects it but this
decision might be taken in hours,
days, weeks or even months and the
booking might take place via website, app or telephone/email.
This stage requires the website to be responsive, well summarized content, user friendly
communication and fair price display.

➢ On-Location Service: Stay

This stage accounts for major customer satisfaction and is the most crucial stage. This
stage determines whether the customer would return again or would recommend the
hotel and website to his peers, friends, and family. This is based on some obvious
factors of cleanliness, convenience, prices, food, distance, room service, handling of
complaints and many more.

➢ Post Stay/Retaining Customer: Loyalty Stage

This is a follow up stage and has become important in today’s time with the increasing
use of social media which customers use as a platform to share their experience,
feedback etc. The hotels or websites might use various means of retaining customers
like travel ideas, discounts, offers, blogs to motivate customers and renew their desire
to travel again.

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d. How can each type of online content affect value creation on the
customer journey?

Different broad stages of customer journey are –

➢ Awareness
➢ Consideration
➢ Decision
➢ Buy
➢ Repeat
Types of online content and their effect in value creation on the customer journey:
❖ Expert content: Generally, from third party influencers, such content is very impactful
and influential from start to finish of customer journey.
Examples are various review articles, videos, and blogs on different social media
channels online.
As a customer, such content help in adding value by helping them with various options
available and wide range of offerings from which they can make right considerations. It
helps in adding to their knowledge, by helping them recognize their needs and thus
making lives easier. Such content is appealing to consumer and help in adding to their
knowledge about the product or service offerings.
❖ Brand Content: Availability of brand content through various social media platforms
and a company’s website help the customers to verify information that they get from
experts online thus aiding them in making informed decisions as per their requirements
and expectations
❖ User Content: It helps in further refining their decision so as to come up with a final
choice before nurturing the buying action
❖ Online websites and mobile applications: These platforms help customers to finally
select a product and make a purchase so that they can avail the benefits offered by the
product or service purchased by them
❖ Finally, their purchase and usage of the products/service help them in analyzing their
decision and further decide to repurchase.

2. AccorHotels developed a customer experience model to describe the

entire travel experience. For each stage in the model describe the type
of information customers tend to search for/engage with and how it can
influence decision-making.
The company under the leadership of Bazin that the customer retention was driven by
experience and the memories customers retained about their hotel stay. The level of interaction
the hotel had with guests, along with the ability to use information to improve the experience,

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were the key factors influencing the level of customer experience. It developed a customer
experience model consisting of seven steps:

1. The dream: In this step, the customers look for destinations that are available for them
to go, they browse through the available options and this tends to influence their decision
of whether they would like to go a destination and also influences the choice of it
2. Selection: In this step, customers look for the hotels that best suits their requirement.
In other words, hotels that offer the best value proposition to the customers are looked
for. To help build the customer experience at this step, the company offers a single multi
brand web portal to the customers, influencing their decision to choose the hotels by
way of providing a host of options.
3. Booking: In this step, customers book the hotel that they have decided upon in step 2.
They tend to look for information about how many people have booked the hotel in the
past as well as how many were satisfied with it. Also, information on whether prepaid
bookings are necessarily required. Middle income groups may develop concern over
this. Customers may also look for payment options. With the advent of wallets, there
may be preference of payment depending on the options available.
4. Planning: In this step, customers prepare themselves for the stay at their chosen
destination. They look for information on places that are nearby and they can go to. City
Guides play an important role in this. This influences their decision of choosing a
particular brand of hotels. Value adding information increases their overall experience
and increases their satisfaction. Readily availability of data provides convenience to
them and they tend to go for the hotels that help them in preparing for their stay and
designing an itinerary.
5. Travelling and staying: In this step, customer reaches the hotel and stays for the
booked duration. This is the most important part of building customer experience. Details
pertaining to the number of people that have stayed in the hotel, the service level such
as time taken to service an order, the quality of rooms, etc. affect the decision-making
process by affecting the satisfaction level and the decision of repeating their stay at the
hotel. Further, commute to and from the hotel is also one of the important pieces of
information required.
6. Sharing the experience: In this step, customers share their experience they had with
the hotel on the social media and other channels. The type of comments and reviews
that are made about the hotel affect the decision of potential customers whether to book
the hotel or not for their stay. Feedback forms, surveys and questionnaires provide key
data points about customers’ experience.
7. Loyalty: In this step, customers develop a level of loyalty to the brand that they like.
They tend to prefer the chain of hotels for their future stay as well as recommend the
same to the others. The data pertaining to the number of loyal customers who regularly
prefer the hotel chain tend to influence the decision of potential customers as well as
current customers as a large loyal customer base tend to instill confidence in the
customers about the brand. Loyalty programs confer certain benefits to the customers
and information of enrolment, benefits and partnerships with merchants influences
repeat visits to hotels.

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3. Describe Accor’s business strategy and show how effective it is for
competing against Airbnb? What else should AccorHotels do in order
to enhance its competitiveness against digital disruptors like Airbnb?
Accor’s New Business Strategy post appointment of Bazin
AccorHotels realized the new age customer requires much more than the conventional hotel
ambience. The new strategy was oriented towards bettering customer experiences by
incorporating greater use of technology and designing new offerings that attracted a large
customer segment – the millennials.

• Focused on these pillars:

o Two fields of expertise – HotelServices (operator and franchisor of 4,100 hotels operated
under the group’s brands) and HotelsInvest (owned 1,183 properties). HotelsInvestor
streamlined and managed existing assets through disposals and acquisitions. The group
aimed that the classification would help manage assets better and increase flexibility as
well as profitability.
o New brand name and new promise – ‘Feel Welcome’: The group drew closer to
customer centricity and reflected passion for hospitality.
• Reliance on Digital Transformation Initiatives: A five-year plan called ‘leading digital
hospitality’ was launched for which €225mn was allocated and focus of the plan involved:
o a common mobile app for all the hotels
o strong customer focus: ‘Voice of the Guests’ project leveraged useful customer data to
provide tailor made customer experiences. Food and drink products were redesigned to
incorporate the local flavour and to give more personalized experiences to millennials.
o tools to streamline customer experience: easy online bookings, hassle free payment and
loyalty program called ‘Le Club AccorHotels’
▪ Optimum utilization of existing assets: Daily services to residents who lived close to
hotels such as holding of keys/packages, picking up of dry cleaning, recommending
of best services in proximity etc. These services could be availed through the loyalty
program.
• Cultural transformation: Tried to make the organization flatter, faster in decision making
and more agile. Personal growth of employees through learning and development programs
was put at the forefront. Innovative tech oriented work spaces were built with the aim of
facilitating high connectivity.
• Structural changes with investment in R&D:
o Appointment of Chief Disruption and Growth Officer: Thibault Viort – 42-year-old serial
digital entrepreneur was appointed for this position to identify growth opportunities,
actively engage within the entrepreneurship circuit and oversee investments and
acquisitions in emerging activities.
o Shadow Comex: A think tank for innovation projects where participants were all
millennials within the age group of 25 and 35 years. They were also involved in strategic
decision making.

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 o Marketing Innovation Lab: A lab, more like an incubation centre, to develop lifestyle
brands for millennials.
▪ Jo&Joe was a brand that combined formats of private rental, hostel and hotels.
• Inorganic growth – expansion through acquisition and investments in direct and related
businesses:
o Mama Shelter (35% stake): Chain of hotels and restaurants which provided living spaces
that made guests feel at home.
o Wipolo: Online platform that manages itineraries, linking them with social media
channels – Facebook and Twitter.
o Fastbooking: Direct digital marketer of hotels that served more than 3,500 hotels in
Europe and Asia.
o FRHI: Luxury brands acquired including Fairmont, Raffles, and Swissotel.
o Squarebreak (49% stake): Renting out luxurious homes with hotel services in three
countries – France, Spain and Morocco.
o Oasis Collections (30% stake): Marketplace for private rentals with hotel services
including concierge services and access to members’ club venues.
o Onefinestay: Upmarket accommodation provided by local guest service teams 24*7. It
held patent over ‘Sherlock keyless entry technology’ that enabled secure keyless access
to Onefinestay homes.
o John Paul (80% stake): World leader in concierge market that provided premium
customer and employee loyalty services to 3mn clients.
o Travel keys: In 2017, negotiations initiated for this private vacation rental broker with
over 5,000 upscale villas.
Effectiveness of Accor’s Strategy
While Airbnb was shifting focus to get more business customers on board, Accor was focusing
on entering businesses within the shared economy space and investing on high end hospitality
businesses which returned high margins as can be seen from the list above. Jo&Joe is a classic
example of a business model that vests on principles of shared economy. Plan to open 50
Open Houses by 2020 under this initiative indicates the likelihood of greater acceptance of the
concept and demand for more. Some of the investment was also directed towards building
better digital platforms to interact with the customers and absorb feedback.

• Mobile application was well received: By 2016, app showed users’ increase by 40%. In
2015, it was expected earlier that mobile bookings would increase to 35% and within five
years, the number would increase to half.
• Loyalty Program: The electronic membership card had 25 million members enrolled.
• High growth acquisitions: John Paul was estimated to double sales to $170mn by 2018 and
Squarebreak was estimated at the time of acquiring to 1000 listings in 2017 from 250 in
2015.
• Revenue: As far as revenue is concerned, most of the acquisitions coincided with the period
of 2014-16 and the actual impact would have been realised later. Nevertheless, net profit
increased by 8.1% in 2016 while EBIT increased by 4.6%. The group also considered itself

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 the biggest hotel operator in the world with direct influence over 75% of its 4,100 hotels in
2016.

Additional steps that could be taken up by Accor

It is important for Accor to understand that there is a fundamental difference in business models
of Accor and Airbnb. While Airbnb relies on an asset light model, Accor places more reliance
on physical assets and acquisitions. Bazin envisioned to create 30% new activities and drive
the remainder from classic hotel business within five years. In order to enhance
competitiveness, the following can be done:

• Social media analytics: Enabling people (rather millennials) to manage itineraries online
and helping them integrate plans with their social media handles are not enough. It’s
important for the business to engage with the audience through social media and regularly
run campaigns to entice travelers to visit some of the most scenic properties under the
Group’s control. It is also important to use social media analytics to study consumption
patterns of the tourists who have travelled destinations where Group’s hotels are present
and understand what metrics could have compelled the traveler to choose a certain set of
hotels. Analytics can also help Accor design promotional events during seasons witnessing
high traffic to attract more eyeballs.
• AI assistants: Customers in this day and age are using Google Assistant/Alexa to book
appointments and an interface is required to integrate these interacts with that of the
hotel/hospitality partner. Hotels could also use AI assistants to book accommodations and
automate standard interactions with customers to enable faster processing of a transaction
in terms of money and time.
• Greater emphasis on personalization and quality assurance: It’s difficult for Airbnb to
personalize accommodations as these are hosted by owners different from Airbnb.
However, Accor could leverage data collected of customers from their previous stay and
replicate personalized service offerings the next time they visit through Accor’s chain of
accommodations where there is high degree of standardization and quality assurance.
• Demand driven pay plans for students and repeat customers: As with food, Accor can
experiment with business models that involve rather fixed or repeat stays. For example:
Accor could tie up with management schools that sends its students for internships every
summer. These stays are usually for a fixed period of say 8 weeks and usually in
metropolitans. Such partnerships can attract more traffic and increase utility in non-holiday
periods subject to availability of space.