Accor operates in all tourism and hospitality segments through its many owned brands and franchises. It is a strong player in augmented hospitality with a presence in 100 countries, with its European operations accounting for 47% of the global room supply (Damnjanović, Lončarić, & Dlačić, 2020). Accor’s highly diversified portfolio falls into four major segments: luxury, premium, midscale, and economy. Its model of value creation centered on supply chain partnerships and internal digital capabilities has helped the hotel thrive during industry disruptions.
The tourism industry has experienced remarkable disruptions over the past two decades. Clients desire personalized and unique travel experiences, which is an existential threat to the travel agent business. Additionally, emerging generational trends impact leisure travel, as Gen Z prefers Uber and Airbnb to traditional car rentals (Damnjanović et al., 2020). Today’s informed and empowered customer also demands superb services from hotels. The rising digital platforms have disrupted the traditional value chain and call for innovative business models.
Accor’s core business model is founded on the augmented hospitality concept. According to Damnjanović et al. (2020), the main vision behind this form of hospitality is to offer travelers unique experiences through diverse and innovative accommodation brands and new value-chain solutions. It encompasses giving back to local communities, rewarding customer loyalty, motivating staff, and enhancing inclusion. This model is consistent with Accor’s meaningful hospitality value proposition. It emphasizes customer-centric strategic responses of iconic partnerships, rewards for brand loyalty, and authentic and satisfying community-oriented experiences as opposed to focusing only on excellence.
The disruptors are start-ups offering low-cost products to low-value consumers, which are not Accor’s primary market segment. Classic examples include HomeAway and Airbnb that initially provided travelers with peer-to-peer accommodation to travelers at residents in tourist destinations. This disruptive business model means that they can offer low prices because of low fixed costs and staff requirements. As the disruptors grow in popularity and quality, they will begin targeting high-value customers; hence, Accor, with its asset-heavy business model should be concerned.
The disruptors (HomeAway and Airbnb) are similar as they both use internet-based technologies to attract travelers and provide peer-to-peer accommodation. Their value proposition is providing low prices for a more local experience to appeal to the low-end market segment. However, the two brands differ in the type of guests targeted. Airbnb generally seeks to appeal to adventure-seeking travelers through unique experiences.
In contrast, HomeAway is more inclined towards families and operates private rentals in traditional tourist destinations. With the advantages of low prices and local experiences (cultures), these disruptors are likely to extend to the high-value segment. Given Accor’s comparatively asset-heavy business model, they will compete effectively through low median rates.
The customer journey involves distinct points of interaction or stages, each with different players. Accor’s digital marketing strategy includes four steps: “customer acquisition, distribution, guest experience, and customer retention” (Damnjanović et al., 2020, p. 239).
In the first stage, the customer searches for a product online and is convinced that it meets his or her expectations. He passively consumes messages contained in sponsored social media ads, search engines, and company sites and engages with the company through personalized e-mails (Hiltbrand, 2015). In the distribution stage, a web partnership strategy involving online travel agents and sales representatives is employed to promote the product.
Based on the net promoter score, the customer’s role is either that of a promoter or detractor – urging others to avoid a product or recommending a favorite brand on individual social media pages (Stahlkopf, 2019). In the guest experience step, the customer uses mobile apps, web-based booking, and online payment systems that offer personalized interaction with a brand. In contrast, in the retention stage, the customer gives feedback online on his or her experience of a service.
In the customer acquisition stage, Accor’s clients interact with a brand through diverse digital marketing tools. These technologies are popular social media platforms, including Facebook, Twitter, and YouTube. They also participate in sponsored sporting activities such as Roland Garros and the Australian Open (Damnjanović et al., 2020). Customers also consume information in paid search ads and metasearch engines, including Trip Advisor, and big databases. In the distribution step, they use Accor’s websites, web partners, online travel agents, mobile app, and sales agents. In contrast, smartphone apps, online booking systems, in-app features, and electronic payment tools support the guest experience. In the last step, customers share their experiences through online guest feedback systems.
A client is motivated to move to the next stage of the customer journey mainly by personal interactions or compelling stories told to reinforce a good image. Thomke (2019) notes that positive word of mouth can “drive customer decisions more than price and functionality” (p. 57). It infuses emotions into the client’s journeys, eliciting passion for the brand and the motivation to keep going to the next stage. The emotions include disbelief and delight (from getting a good deal), anxiety (related to losing an opportunity), or a sense of achievement for securing the reservation (Thomke, 2019). Positive feelings are important as they create stable communal relationships with the brand and enhance satisfaction.
Customers faced with uncertainties, jargon, and other issues may not transition to the next stage. Perceptions of neglect, unfairness in business procedures or revenue sharing, and mistrust can damages the relationship with a brand, stopping it at the transactional state (Zhang, Watson, & Palmatier, 2018). This step is characterized by limited trust, commitment, and dependence between the customer and the brand, which harm progression to the next stage.
Damnjanović, V., Lončarić, D., & Dlačić, J. (2020). Digital marketing strategy for Accor Hotels: Shaping the future of hospitality. Tourism and Hospitality Management, 26(1), 233-244.
Hiltbrand, T. (2015). Fire up your social media strategy with big data analytics. Business Intelligence Journal, 20(3), 8-16.
Stahlkopf, C. (2019). Customers: Where net promoter score goes wrong. Harvard Business Review, 1-6.
Thomke, S. (2019). The magic that makes customer experiences stick. MIT Sloan Management Review, 61(1), 57-63.
Zhang, J. Z., Watson, G. F., & Palmatier, R. W. (2018). Customer relationships evolve – So must your CRM strategy. MIT Sloan Management Review, 59(4), 82-85.