This paper is critically assess a range of future strategic directions of Accor Hotels Group, illustrating how competitive advantage can be achieved and consider suitable ways of implementing a change in strategic direction.
Accor is the world’s leading hotel operator, has 45 years of experience. Its hotels spread over 92 countries with 4,400 hotels, the hotel brands from Luxury to budget – Sofitel, Pullman, MGallery, Novotel, Suite Novotel, Mercure, Adagio, ibis, all seasons/ibis Styles, Etap Hotel/Formule 1/ibis budget, hotel F1 and Motel 6. For future growth, Accor believes “…the foundations for future growth with the goal of becoming the hospitality industry’s global benchmark and providing customers with a unique, constantly renewed hotel experience.” (Annual report 2011 p.14)
In order to meet the organization goal, Accor has formulated its future strategic directions “reinventing on its brands, strengthening the relationship with customers, global expansion, reinvent hotels sustainably, and developing people.” (Accor Annual report 2011 p.13)
In 2011, Accor launched the project of modifying the existing economy brands – Ibis family. “A major project was launched for our economy brands, in partnership with our franchisees. Its purpose is to modernize and clarify our offer and make ibis the uncontested world leader in the economy segment… (Accor Annual Report 2011, p.3)

As the global economy changing, some experience travelers may not consider luxury hotels but economy. However, they still expected the best services everywhere, “the creation of the ibis family has led to considerable discussions about the economy hotel experience. That’s because even though customers move from one segment to another – from luxury to economy – they expect the best service everywhere.

To guarantee superior comfort for all its guests, Accor will provide guests with a bed that gives them the most outstanding sleep experience to be found in the economy segment. The Group has launched a major program to improve the beds in the three ibis brands…

Renovate common areas in most ibis budget and ibis hotels, making them more spacious, lively and contemporary. The renovation will lead to in-depth discussions about how guests will be welcomed in the hotel of the future, with a shift from reception areas to social areas.” (Accor Annual Report 2011, p. 18)

Here, Accor demonstrated its success of using product development strategy which modified the existing product lines - Ibis family by adding values such as upgrade the bedding, renovate the common areas…etc., for targeting the more specifically to the needs of some existing /or new consumers (see figure 1).

Figure 1: Ansoff’s Growth Martix - http://www.howtobeamarketer.com
The more economy hotels openings should be Accor’s future strategy direction, ibis “...the brand expects to open more than 300 hotels by 2015 and launch operations in around 15 new countries.” (Accor Annual Report 2011, p.35)
Furthermore, Accor adopted the differentiate strategy for the firm’s product to distinct from others rather than the cost leadership strategy. Porter suggested that there are three generic strategies that can enable any business to achieve a sustainable competitive advantage (see Figure 2). Figure 2: Porter’s Generic Strategies - http://www.quickmba.com/strategy/generic.shtml
Accor brings the local cultural difference to the Chinese market, introduced “Mei Jue, a version of Grand Mercure purpose designed to meet the expectations of Chinese customers in the upscale segment…” (Accor Annual Report 2011, p.19)
This brand is different from the luxury hotels “features the “Discover a New Authentic” concept that aligns each hotel with its setting and is reflected in reception services, relations with local art and walkways that enable guests to discover the hotel’s environment…
For example, the Grand Mercure Shanghai Zhongya – the first Mei Jue hotel – was inaugurated in late February 2012. Customers are greeted by employees wearing a qipao, a traditional elegant dress, and can relax mind and body in daily tai-chi classes. They can also enjoy a bowl of congee – a rice-based porridge – anytime around the clock.” (Accor Annual Report 2011, p.27)
By creating the product that perceived as being unique throughout the industry. Accor is able to charge the premium price on Mei Jue brand hotels. Accor plans to open 65 Mei Jue hotels by 2015, which the differentiation strategy is Accor’s future strategy direction.
Accor expanded its business through global and outside the company’s existing resources (see figure 3). They conducted the activities such as Join Venture, Franchising, and Acquisitions. Figure 3: Expansion method Matrix – http://www.global-strategy.net/categories/Linkingstrategicmanagementandglobalstrategy For examples, “In 2011, Accor join with its partner Unibail Rodamco, acquired the Pullman Montparnasse (formerly the Meridien Montparnasse) in Paris, one of Europe’s largest hotels with nearly 1,000 rooms…
In late 2011, Accor signed an agreement to acquire Mirvac group’s hotel management operations for E195 million. As a result, 48 hotels will join Accor’s Australian and New Zealand network in 2012, mainly in the midscale, upscale and luxury segments.” Accor Annual Report 2011 p.56
“Two franchise contracts were signed at UK, one early in the year with Focus Hotels concerning ten hotels and the other in late September with Jupiter Hotels Ltd for 24 units formerly operated under the Ramada banner. It pursued the development for Mercure Brand in the UK.
…In November 2011, Accor singed three major contracts with several partners to build 25 hotels to be operated via franchise agreements under the ibis budget brand.” (Accord Annual Report 2011 p.58)
The expansion method of signing the more franchise contracts is the Group’s development strategy, also the Group’s future strategy direction.
In order to identify Accor competitiveness, Porter’s Value Chain (see figure 4) is used to analysis which activities is strong / or weak over the organization. Figure 4: Porter’s Value Chain – http://en.wikipedia.org/wiki/Value_chain
For the marketing and sales, Accor has used the highly responsive social networks like Facebook, Twitter, TripAdvisor and YouTube to promote the Accor Brands. These networks could offer the Group to interactive with customer-fans. For instant, Ibis, Ibis Budget, and Sofitel have 22,500, 24,000 and 42,000 fans on their Facebook Page respectively. The platform is able to inform about the hotels products and promotions. (Accor Annual Report p.46)
Le Club Accorhotels loyalty program is another Accor activity of marketing and sales. Le Club ensures customers have personalized welcome, targeted offers and dedicated promotions. For example, members is able to earn points of each spent in an Accor hotel and could be used in the network or converted into miles with airline partners like SkyTeam and Star Alliance. The loyalty programme serves as an important lever for retaining and communicating directly with guests. (Accor Annual Report 2011, p.46)
Travel Accor Reservation System (TARS) is Accor’s central reservation system which the firm infrastructure activities that connected to all distribution channels like direct sales from Accorhotels.com, brand sites, and Call centers…The indirect sales like 21,000 traditional /or online travel agencies, wholesalers and tour operators; time-honored distributor partners like America Express and Carlson Wagonlit Voyages. With this well developed reservation system, the Group could control all reservation from various brands, locations…etc, providing supports to the development strategy of business expansion. (Accor Annual Report 2011, p.47)
Resa Web is a practical tool easy-to-use booking management system, another Accor’s technology development for frontline staffs handling inter-hotel bookings, optimizing rates, providing additional customer services, also managing the multi-rate systems and travel agent agency commissions,. This tool could securing data, providing comprehensive reporting, and constantly updated by the TARS database. This technology development could offer the hotels to maximize occupancy and manage the business more closely. (Accor Annual Report 2011, p.48)
In view of the services activities, Accor provides the service level in line with new customer expectations. “For examples, more than 10,000 employees have taken part in the Naturally Different program whose purpose is to teach the right attitudes and the best response to the special needs of the handicapped and the elderly, as well as children, foreigners and homosexuals; Another example is Australia, where team have been trained at Sofitel and Pullman to welcome Chinese and Indian customers and address their special needs.”
Besides, an understanding of customer preference is required for the repeated guests. Accor sets the “Personalize customer welcome and services upon the arrival for the Le Club Accorhotels loyalty program members. As it is reflecting on reception services, the front office managers have to conduct the special training to the reception staffs for ensuring the services execution. (Accor annual report 2011, p.83)
The Group procurement is, “to identify, evaluate and select innovative, competitively priced products and services that comply with each brand’s standards, as well as with regulatory requirements and sustainable development criteria, and negotiate their purchase with suppliers.” That is not just the price, the Group working with all operations departments in order to buy product at lower price with concerning their integration installation, maintenance and recycling costs. Accor has certified thousands of products and services, which are divided into 100 families in a database that is enable to refer to the partners. (Accor annual report 2011, p.50)
This analysis shows Accor is strength of Infrastructure, Services and Sales and Marketing. These are the competitiveness of Accor to develop/expand its business in “digital hospitality”.
The Group has 180,000 employees serving 10,000 of guests in 4,400 Accor brand hotels every day. As hotel is a services business, employees are very important to the business success (Accord Annual Report 2011 p.75). As a result, Human resources capabilities are the core competences of Accor.
For examples, Accor concerns the employees employment and health; ‘regular opinion survey’ has conducted to gather the employee’s views of their job satisfaction, and used to prepare improvement. The prevention training sessions for the health and well-being of employees were conducted over 77% of Accor hotels, while in France, 8,629 ergonomic beds were installed in 168 hotels to make changing bed linen easier for housekeepers…” (Accord Annual Report 2011 p.76) these of Accor, shows responsible to the employees.
In order to acknowledge the employee’s commitment and talent, Accor has established the recognition programs including the Accor Bernaches Awards, and the Professions Challenge. (Accord Annual Report 2011 p.76)
Besides, Accor emphasizes the diversity of team members, designed and deployed core programs to make diversity a reality in hiring, career management, training…etc., encourage the employees to share the skills and knowledge in order to build up an expertise team.
For example, “The e-learning module on diversity designed and deployed for the Group’s 2,500 hotel general managers and department heads in France. The module provides virtual training on five key phases in manager’s work life: hiring, assessment, career development, training and conflict management. The goal is to eliminate discrimination and celebrate diversity.” (Accord Annual Report 2011 p.77)
On the other hand, for supporting the Group’s development, Accor used Resource-based view of strategy to sustain the employment retention and recruitments. The organization intends / designs career paths that will help to attract, develop and retain the best people.
For examples, a wide range of mainly digital tools have been developed such as AccorJobs hiring site, Linkedln on Accor page, the blog working@accor became an AccorJobs Facebook page, also the AccorJobs offer on the Jobaroundme iPhone application.
To develops in-house experts, especially in cutting edge fields such as revenue management and Sales department.
“Accor is constantly developing revenue management experts through the training programs of RM Dimension (which is dedicated to revenue management professionals, hotel general managers and accommodation and booking managers) and RM Pro (the module, which enable program participant to improve their understanding of room rate polices and reservation forecasting.).” (Accord Annual Report 2011 p.79)
“As the sales function becomes more complex especially the ever-expanding new technologies, the Sales & Distribution Pass training module is designed to provide the Group with a pool of sales professionals and maintain its standing as a market leader.” (Accord Annual Report 2011 p.79)
Make the Internal promotions, “The Group has set a target of 75% of hotel general managers developed through internal promotion by 2015. Hence, Accor promoting the internal mobility program for supporting its employees skills enhancement, motivation and loyalty. The key is to retaining employees.” (Accord Annual Report 2011 p.80)
The external environment is changing rapidly; firms need to change the internal factors in order to suit the external issues. STEER Analysis is used to evaluate what external environment impacted to the Accor Hotels.
The social cultural trends, is encouraging healthy environment of food-related, hygiene and environmental risk. In fact, “Obesity and poor eating habits are afflictions that affect an ever-greater number of people. They are responsible for such health problems as hypertension, cardiovascular disease and diabetes.” (Accor annual report 2011, p.66) Accor has implemented on nutritional issues, working with nutritionist to offer the balanced dishes menus.
“Epidemics are not the things of the past. Globalization is spreading them at a faster rate, and at the same time diabetes, cancer, cardiovascular illness and other chronic diseases are also developed rapidly.” The in-house knowledge is essential to the diseases prevention. Accor has organized prevention training sessions involved “first aid, workplace ergonomics, prevention of HIV/AIDS and chronic diseases, and psychosocial risks”. (Accor annual report 2011, p.66)
Furthermore, some Accor hotels choose to use the eco-labeled products of detergents, wall paint…etc. intends to establish the healthy interiors, adapting to the social cultural.
For the legal factors, certain countries have introduced regulations that require low energy buildings and minimal impact on ecosystems. Some Accor hotels open to use, i.e. “65% of hotels used energy-efficient lamps for frontage lighting; 25% of hotels recovered energy from the ventilation system; 18% of hotels used building management system to steer heir energy consumptions...” (Accor annual report 2011, p.70)
As the soft of global economy growth, it moved some travelers to shift their hotel accommodation from luxury to economy. Thus, Accor have developed Ibis family brands to serving the economy customers. Today, no one doubts the importance of the Information Technology. For instant, “in 2011, the online sales rose to 26% of the total. The increase reflects the profound changes in e-commerce and more specifically in the travel market, brought about by the rapid development of cellphones – including smartphones – and social networks.” Accor should focus its distribution strategy on the Web, mobile application and social networks. (Accor annual report 2011, p.45)
The ecological factors being awareness over the world, Accor states “Hotel energy consumption is the area of operations that has the greatest environmental impact and also the most important way of taking action.” Accor strengthened its resources to reduce energy use, CO2 emissions, and increase the use of renewable energy. (Accor annual report 2011, p.69)
For evaluating strategic alternatives, Johnson & Scholes (2007) suggest a process called Suitability, Acceptability and Feasibility. Choices of Accor strategies are fit to this SAF framework.
The reinventing on Ibis family brands is suitable to the economic environment; introduced Mei Jue hotel brand to meet the expectations of Chinese customers in the upscale segment, also suitable to the emerging market’s economic environment; the expansion method used is acceptable and favor to the stakeholder returns; the digital strategy and distribution strategy shows proper to today’s Information Technology environment. All in all, Accor has the strong of people development could feasible to implement the choices of strategies.
However, the strategic drift is exists. Competitors like IHG, have more than 666,000 rooms over 4,500 hotels in nearly 100 countries and territories around the world. Its resources is more than Accor, enable the firm fast development. The Information technology development provides the transparent platform to all levels. For examples, customer complaint could spread over and damage the hotel speedy. On-line sales technology may provide competitors gather the marketing information and copy the selling strategy easier. At last, the hotel business environment is full of opportunities but competitive.