M31217 - AccorHotels vs. Airbnb: Competitive Strategy Case Study

Competing Against Airbnb: Accor's Innovative Approach

Introduction 

The report is made to discuss the digital transformation in the travel and hospitality industry, and commencing smart rooms to mobile technology, Accor is off to a rapid start. At present, the company is the biggest tourism brand in Europe, with over 140,000 workers. The firm has the industry's most miscellaneous and fully-integrated hospitality ecology surrounding more than 38 lavishness, quality, midscale, and wealth hotel brands, restaurants, and bars, recognized private residences, shared housing properties, gatekeeper services, leisure and nightlife venue, co-working space and many more. The report will discuss the hotel industry which is being interrupted by a new digital company who have to enter the marketplace and confront the conservative hospitality approach. According to Pulumbarit, Reyes and Sanchez, 2022 the sharing country in particular, with Airbnb, establishes in the front, have formed a major challenge for established hotel firms. As a response, Accor hotels which are operated in Europe as a leading hotel group is obtainable through a foremost digital transformation that impact its business culture, value proposition, organizational structure, and general business model.

Figure 1: Accor Hotels

Figure 2: Airbnb

Critically appraise Accor hotel's digital strategy. How well-organized it is for competing in opposition to Airbnb? 

Accor, the global foremost hotel operates with more than 3,500 hotels, at present reveals its digital strategy intended to consolidate its leadership all through the hospitality value chain. The leading digital strategies are Accor's worldwide reaction to digital challenges, in a marketplace definite by the accelerated rapidity of technical change and rapid development of customer practice. This has enabled the brand to enhance its customer database and build up further loyalty. The hospitality business is being disrupted by a new digital company, with the distribution market start-up Airbnb taking the front in altering the outline of the industry (As cited by Antonopoulou and Begkos, 2020). 

Though these disruptors are challenging the conservative hospitality advancements, many conventional hotel groups first showed modest reactions to the beginners because they had a modest impact on bookings. The aim is to revolve the conventional asset-heavy corporation into a dynamic player in the innovative hospitality country, able to contend head-on with the firm’s digital disruptors. With the rising fame and income of Airbnb, Accor Hotels required acting speedy to adapt and avoid being eaten by this increasing massive. Although other companies in the business such as Hilton did not distinguish the increasing threat of Airbnb, and the necessitate to move away from its conventional approaches, as it supposed Airbnb was only target market travelers, Accor did not construct a similar mistake and was determined to take accomplishment (Guillet and Mohammed, 2015).

Distant from the shared market factor, Airbnb also had an edging on the digital stage, as it had an outstanding mobile occurrence that describes and maps nearby attractions and services from any associated device. Accor rapidly recognized the risk that digital disruptors, in meticulous Airbnb, pose to its business. Its major challenge was to change an asset-heavy, hierarchical corporation into a vibrant, supple, and fast-moving group. In adding up to transforming its organizational structure, corporate culture, value proposition, and overall business model, the company implement a violent acquisition approach. The company’s booming digital alteration offers lessons for an incumbent rival with digital disruptors in a range of industries. It consequently had to become bolder, more flexible, and quicker in decision-making and carrying out, which would signify essentially changing managers' and employees' mindsets. 

The digital strategies followed by the Accor hotel's which significantly well-organized for competing in opposition with Airbnb are:

• Mobile technology: this takes into description customers' immigration to devices, such as tablets and smartphones, by rolling out a solitary mobile appliance incorporating all of the company's services during, before, and after a hotel stay. A predominantly smart characteristic called Mood Match which allows consumers to construct a profile of their perfect experience, and the application will then help them with to find out the perfect location for their stay. Consumers can set their preference on 3 criteria which includes aesthetics, ambiance, and neighborhood, and then include extra consideration such as relation, family, etc.
• Accorhotels.com website: it is the company's multi-brand booking entrance, which manages a standard of 44,000 uncertainties per day. It is previously obtainable in 31 local version and 15 languages and now offer a new trip-scheduling service that enables consumers to organize their stay in 68 destinations around the globe.
• Customer Centric: According to Bharwani and Mathews (2021) the company has developed and makes the most favorable use of a database to make sure modified services and follow-up, and has consolidated feedback on a sole stage known as the "Voice of the Guests".
• B to B: the company has developed an innovative digital solution for business, such as online reservation of discussion group amenities, and has more and more incorporated B to B services in the worldwide booking website.
• Seamless Journey: this has ensured handiness for consumers at every stage of their experience which includes a one-click reservation, electronic payment solution, online check-in, and virtual cards helping the brand to attract a large number of customers.
• Smart rooms: Another way the company is using digital technology to increase the hotel experience for its visitors are with its smart room concept. This helps the customers in all kind of facility in a single room, which make them feel satisfied and happy stay.
• The Accor Reservation System (TARS): it is an influential distribution tool, which nowadays centralizes 60% of the hotel's bookings and over 5 million inquiries per day.

The through planning including the program for the company’s employees and partners which are:

• Employee Friendly: the company aims to make simpler welcome tasks using smart devices and smartphones, build up online teaching solutions, and support experience distribution via "AccorLive", a social network.
• Owner and franchise centric: the company aims to make hotels the most resourceful and transparent collaborators, particularly by offering inclusive dynamic price and income supervision solutions, a devoted entrance to access modified information and services, and an optimized bill procedure as cited by Ritala, Baiyere, Hughes and Kraus, (2021).

Diverse value propositions of Accor Hotels and Airbnb’s

Even though the value propositions of Accor and Airbnb were very diverse at first but Accor made some enormous changes to its imitation and end up having a similar proposition by the conclusion (Butler and Szromek, 2019). Both firms stretched out and diversify into similar services, Airbnb was based on shared lodging and providing visitors with a local travel facility. It does not own any real estate itself and acts as a broker while Accor was more into the conventional hotel chain business. It owns and manages alternative and vacation properties internationally and focuses on the direct approach to function its hotel as contrasting to its competitor which operates on franchise models.

Accor hotel's value proposition

The company has focused on its digital transformation on improving the experience of 3 key targets i.e. hotel owners, guests, and interior teams. In general, this means reforming the process for each of these targets and providing the best service potential by empowering its teams who handle the relations with its guests and owner (Prihanto and Kurniasari, 2019). Accor pays very close concentration to its owner’s requirements and ensures they benefit from the best service and most modern technology. The company wants to facilitate its owners with more clarity, more well-organized tools to share information, and more teamwork in decision-making.

The human resource remains necessary in structuring trust and loyalty in sale and trade relations, and digital visibly plays a main role in this. The brand’s teams interrelate with hotel owners all through the entire hotel lifecycle, and deal negotiation, from hotel prospect, agreement signing, solutions up selling, operating, and contract renewal. The company’s team members directly interrelate with hotel owners Mody, Hanks and Dogru (2019). They divide them into 3 groups with exact needs. The developer team has an objective to expand the hotel network. They view new hotel opportunities, discuss deals, and sign an agreement with the owners.

Airbnb value proposition design

1. Space listing: this gives the proprietor the chance to catalog their space and can receive rental money.
2. Insurance provision: company also provides insurance to listed rooms and properties.
3. Economical stay with host: they also give travelers the possibility to stay with local hosts, and therefore, it turns out to be cost-effective as cited by Leroi-Werelds, Verleye, Line, Bove, (2021).
4. Rating and appraisal service: The owners and visitors can appraise each other, therefore, bringing more transparency and responsibility.
5. User-friendly application: The web organization and application is trouble-free to make use of, consequently, listings and bookings become calm.
6. Build up an innovative value proposition to obtain resources from partners: the company offers asset owners the chance to turn into hosts to create extra income. The group gives hosts admittance to a team of travelers throughout the platform and relieves one of the major pains for asset owners (As cited by Carrasco-Farré, Snihur, Berrone and Ricart 2022).
7. Participate in a new cost structure: the group competes on a lighter cost structure than hotels, for the reason that it owns no hotel, nor employs clean-up or service workers. The group’s operational expenses are general proposal management, promotion and marketing, and other host and explorer sustain activities.
8. Double-sided stage: for the group to be striking to hosts, it requires a huge pool of travelers. 

Strengths and weaknesses of each firm’s business models

Strength of Accor hotels

• Luxury segment: the company has an extremely rich range of midscale, luxury hotels, and budget hotels. It has group of visibility all over the globe and a recognized brand name. Their lavish brands include Sofitel, Banyan Tree, Raffles, and many more. Therefore by catering to all income types the company has ensured an enormous customer base segment.

• Network: the hotels have an enormous chain of resorts, hotels, and holiday properties. Their procedure span over 98 countries. This network is extending across an assortment of hotels and therefore caters to the populace who travel repeatedly on business or happiness (Petruzzelli and Natalicchio, 2020).
• Business model: In a proposal to increase rapid development while not growing costs insistently, Accor has grown a franchise model. They contain severe norms for franchisees to pursue and keep a label on the operation of their franchise property ensuring that the superiority is maintained.
• Guest communication: All contacts are taken from the register at the time of check out for communicating the new offers and for the improvement through the feedback in each section.
• Loyalty programs: Their everyday guests have admission to numeral rights such as free nights in gathering 3000 points, admiring improvement to superior classrooms, restricted access to private sales, online register, and fortunate checkout as cited by George, (2021).
• Exclusive digital hospitality: lodge chains maintain a database of more than 58 million visitors tracking their preferences and incorporating them into their services. 

Strengths of Airbnb

• Global standard brand: Airbnb has found it's mean in the vernacular around the globe in which it is used as a noun and a verb in some places Madsen and Stenheim, (2022).
• Engaged visitor community: nature of the company’s experience, the individual touch of hosts, and communication with them help visitors easily connect with the Airbnb group of people.

Figure 3 Airbnb vs. Hotels Price Comparison Chart

• Global network: Hosts and visitors cross more than 250 countries and regions, which help the company to thrive on a cross-border journey, and in turn helps create a global brand existence (Petruzzelli and Natalicchio, 2020).
• Custom-build stage: proprietary knowledge utilized by the corporation is intended to serve the exceptional requirements of hosts and visitors. The stage boast industry's leading features for its guests,

Weaknesses of Accor hotels

• Loss to online businesses: in economy segments, the brand is losing its production to online businesses and small hotels like Airbnb and Oyo rooms.
• Focus on franchising: although franchising has helped the hotel chain cut its expenses, service levels, particularly in their lavishness hotels have suffered because of a lack of sufficient attention.
• Overemphasis on sub-brands: this creates a disconnection in the consumer's mind concerning the major corporation and consumers barely know the brand Accor.

Weaknesses of Airbnb

• The pandemic contaminate the financial performance: Coronavirus disturbances have impacted the company’s financial health and its trade. Airbnb's measures to satisfy the pandemic will carry on influencing the firm’s consequences of operations (De Pelsmacker, Van Tilburg, and Holthof, 2018). 
• Lack of superiority control: travelers can find accommodation almost anywhere, but with no value for quality control, the intensity of console or sanitation can vary passionately. 
• Ease of business models: The effortlessness of entry opens this model to replication, and ever since there are not as many systems on the business entity, it is not complicated to open a new crowdsourcing stage.

Conclusion

The report has concluded on Accor Hotel’s digital transformation proposal. The report has critically evaluated Accor's digital strategy. The key features of the report will analyze Accor competing against Airbnb. The objective of the report has examined the difference between the value propositions of both companies. The report concludes the strengths and weaknesses of each firm’s business models.

References 

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