Company update: Accor's digital strategy

Accor’s deputy CEO Vivek Badrinath reveals why the company’s new digital strategy is vital to securing loyalty, improving guest experience and competing with the onslaught of customer-to-customer platforms such as Airbnb

Vivek Badrinath joined Accor as deputy CEO to help shake up the group’s digital strategy. In his own words, “This industry has for a long time been a bit passive. For 40 years, hotel chains were focused on brands and the product and the material side of the stay.”

This passive approach, Badrinath believes, left hotels largely unequipped to deal with the onset of online bookings and metasearch engines, followed by TripAdvisor and now emerging customer-to-customer platforms, such as Airbnb.

“The first wave was the online travel agents and to a large extent they captured a big part of the value chain,” he explains.

“And then hoteliers didn’t do much about the second wave — TripAdvisor and the metasearch engines. The third wave is coming and it’s this Airbnb concept of a customer-to-customer type relationship with a platform in the middle. These are all disruptions of the business model, and that is accelerating.”

Badrinath came on board with a mandate to bring together the marketing, distribution, and IT teams to build and put in place a digital strategy that keeps pace with the “disruptions” he mentions.

He explains how the plan was designed with three targets in mind — customers, employees, and partners and owners — while addressing digital challenges in a market that he believes is defined by the accelerated pace of change.

“Since Sebastian Bazan took leadership as the CEO of the company last year, one of the major areas he felt Accor needed to focus on was digital, particularly due to the impact this has on distribution. Digital was largely seen defensively, as an issue to deal with the rise of online travel agents and the changing patterns of customer behaviour. But we felt it was more than that,” he explains.

“We start with the idea that digital is here to stay; it has a lot of impact on our customers’ lives. It has an impact on the way they behave, the way they interact, the way they make decisions, and it changes their behaviour.”

Badrinath and his team then spent the summer working on designing a strategy that started from the “dream phase” of a customer’s journey, followed by planning, booking, and the experience itself.

This was in line with his belief that both customers and staff are becoming increasingly digitally savvy.

“Technology enables you to have an easier and better travel experience. So fundamentally it’s about improving the customer experience in such a way that we are able to be with them throughout their journey and hence to be able to target them with advertisements, promotions, and information that will help them plan their next trip.

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To this end, Accor unveiled a digital plan that will see the group invest €225 million (US $280 million) over a five-year period to roll out the strategy across its global portfolio. The plan is based on eight programmes, four of which are customer-focused, with the aim to improve customer knowledge about the various brands and properties, as well as add to the services provided.

Mobile First targets smartphone users with an app incorporating all of Accor’s services before, during, and after hotel stays.

“Under the Mobile First programme we’ll be bringing out an app where all the steps of a journey are supported, so descriptions of the hotels, a great booking engine in several languages, including Arabic. We’ll also have a booking engine for restaurants, since choosing restaurants is something you do when you decide to go out, not something that you plan days ahead, so it’s important that you catch those bookings.”

The second programme, Customer Centric, will centralise feedback on a platform called ‘Voice of the Guests’, using personalised follow-up and services based on data gathered at hotels.

“It’s a big CRM investment — we have 40 million customers in our database, and a huge wealth of information, which today we don’t harness completely. That’s why I say it goes beyond booking. Distribution uses this information for bookings, for reservations, but there’s much more to the customers’ tastes than just booking a hotel room. So having information about their stays and the opinions that they gave when they visited the hotel is a big issue and one that we need to develop.”

A third programme, Welcome by Le Club Accorhotels, targets the group’s loyalty programme subscribers, and was expected to be up and running in close to 1000 group hotels by the end of 2014. Welcome includes pre-check-in, allowing guests to go straight to their rooms upon arrival, having filled out the paperwork prior to check in.

“Once you reach the hotel there is a person talking to you — you’re not talking to a computer, you are welcomed, your key is ready, and the hotel has prepared for your arrival. So the whole message is “we were expecting you”. For checkout it’s different — nobody really wants to queue up for checkout, so we send the receipt and bills by email,” says Badrinath.

Using the loyalty programme to leverage the digital programme is a key element of Badrinath’s plan. It’s all part of the strategy to offer more relevant information to guests.

“Its’ actually a good investment for us because loyal customers have more value to the Accor community than people who just come and make a booking and go away. So we need to move as much volume as we can towards direct channels with loyal customers,” he explains.

The corporate and event sector is another important area for Accor, and something that has been improved under the digital strategy. While previously MICE and corporate bookings went through a bidding process centrally, now bookings are done through an online booking engine.

For Accor employees, the Employee Friendly programme aims to simplify customer service tasks using tablets and smartphones, and will also offer online training solutions. Accor employees around the world will also be able to share experiences and tips through Accor Live, the group’s in-house social network.

“When you’re inside a hotel, the information flow can be largely improved. The property management system needs mobile tools, so when you’re walking around the hotel and a customer requests something, you know which room they’re in, how long they’re going to stay, if there’s any specific information that may help you serve them better.

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It’s also for us a way to build a very big enterprise social network as we call it, which gives you access to factsheets, tips, also allows you to communicate with someone who is doing the same job somewhere else in the world,” he says.

Additionally, Owner & Franchise Centric was created to improve transparency and provide real-time data to owners and investors, and will be rolled out in 2015.

An online dashboard will provide information about increases in the number of reservations, guest satisfaction survey results, efficiency of various booking channels, and other details.

Accor has also invested heavily in improving its IT systems to handle the roll-out of the different programmes, while managing the traffic on its websites and booking engines. “Our reservation engine drives one reservation every 1.2 seconds,” Badrinath reveals.

“It’s heavy-duty IT, so we need to make it more agile. It’s becoming such a big part of our business that it’s run
not directly from the hotel, but through the reservation system. We also have the data infrastructure where we store all of the information in order to drive business decisions.”

Behind the digital strategy, Accor has eight programme leaders that are empowered to drive investment and lead the developments. Badrinath asserts that right now is the time to have a digital strategy in place, particularly with new types of accommodation such as Airbnb competing with hotels.

“The disruption in certain cities… the volume an Airbnb will occupy can be very big and that has an impact on the hotel business. So I’d say what is important is to have a plan now and to have the ability to innovate at the same time,” Badrinath says.

What it ultimately comes down to, he summarises, is creating loyalty and providing customers with simple, effective options for booking.

“What is important is the customer knowledge and the loyalty programme and the way you digitise that to make those customers have the best experience possible. Our aspiration is really that people think of themselves as loyal Accor customers, so first they check the app to see if a destination has a property that they like and that is their first choice. And that’s what the battle is about — that we are the first choice; that customers are tempted to choose Accor first,” he concludes.