Accor is to open its booking platform to independent hotels, confirming plans first revealed to this publication.
The company said it expected the move to triple the number of hotels offered on its Accor Hotels website, taking it to more than 10,000 rooms by 2018.
In a presentation, the company confirmed that it would continue to work with online travel agents.
The new service will gradually become available to hoteliers at the end of June, with guests able to access it from July 2015. As part of the plans, the group has changed its name to AccorHotels to tie it more closely to its AccorHotels.com website, which will be the central point of contact for consumers.
Sébastien Bazin, Accor Hotels chairman & CEO, said: “This is the first time when a marketplace as defined by Amazon has existed in the travel space by hoteliers, for hoteliers. We need to stop having the perception that the lowest price is on the online travel agent sites. We need to disseminate this truth.
“We’re not building this to have additional revenues. We’re doing it in order to have a connection with the customer which is going to be more frequent. In the digital world, all the companies that are successful today have three things: traffic, technology and choice. They also have frequency of customer relations which are monthly, weekly, even daily.”
Jean-Luc Chretien, EVP marketing & distribution, added: “We will not demand an exclusive relationship with any of our partners. All we’re doing is offering an additional channel at a more advantageous cost. Using our channel will be the lowest cost acquisition. There is no entry fee, but reservation comes with a commission.”
The company will invest EUR22m on its digital transformation, on top of EUR225m previously announced. The move follows the group’s acquisition of Fastbooking.
Accor Hotels said that it had ‘higher ambitions’ in the UK and Germany, where it had fewer hotels than markets such as France and has identified 300 cities globally to target. It will look in particular at the midscale and upscale sectors.
The independent hotels distributed on the AccorHotels.com platform alongside the group’s branded hotels will be selected, it said, on the basis of hotel criteria with guest reviews taken into account. The company said that AccorHotels.com was already the leading online hotel booking platform in several markets, including France, Brazil, Australia and Germany.
Bazin said: “Accor Hotels is placing its powerful digital tools at the service of independent hoteliers and increasing the choice available to its customers by adding more hotels and more destinations.
“We are becoming a trustworthy, selective and transparent third party and we are once again amplifying the in-depth transformation undertaken within the group since 2013. These initiatives and the launch of the new Accor Hotels application are designed to enrich the content of our digital ecosystem and reinforce our position as a hospitality industry pioneer and trailblazer.”
The latest version of the AccorHotels app will see all the brand apps united in a single app which features all the group’s hotels and, as of this summer, will also include all the independent establishments offered on the booking platform.
The group said that it aimed for the app to become one of mobile device users’ top three travel apps. It includes features such as: storage of information such as flights, train tickets, an e-check-in/fast check out, access to the digital press, city guides (available from early July), and other services which will be gradually introduced, notably taxi booking and room service ordering.
In March this year deputy CEO Vivek Badrinath told Hotel Analyst Distribution & Technology that Accor would consider adding hotels to its portfolio without requiring them to join up to its existing brands.
Badrinath said: “Are we open to distributing third-party hotels? Why not? It’s an easy yes in places where we’re not. If we want a hotel in Kazakhstan, where we don’t have any hotels and it could be added and customers could earn points with the loyalty system.
“Even in places where they’re not in the same catchment area. In Berlin, where we have 25 properties, would we support another 10? Probably. Could we? Why not? Amazon has Marketplace, which is essentially giving their distribution to direct competitors, and they make money out of it.”
The time has now come to put the plan into play and see if it pays.
HA Perspective [by Peter O’Connor]: Following much industry speculation and more than a few rumours, Accor has finally shown its hand and revealed precisely how it intends both to work more closely with independent hotels as well as compete more effectively with the global OTAs. And in the process they has also shed more light on why they recently invested in online marketing provider Fastbooking.com.
In effect what Accor is doing is adding another potential layer of service for hotel owners. If you do not want to get Accor to run your hotel through a management contract, or do not want to buy its brands and operating expertise by buying a franchise, then perhaps you will be willing to purchase its superior access to online markets? And all of course for a small (compared to the OTAs that is), totally performance-related, fee?
Complementing this with a direct website, direct bookings engine and online marketing services comes from the Fastbooking part of the puzzle, creating a very compelling portfolio of services for an independent property struggling to find its way in the electronic world. And FastBooking’s existing portfolio of clients gives it the running start that it needs to get to the critical mass required to make the entire venture profitable.
But while the benefits for independent hotels are clear, and in many ways more attractive that further selling their soul to Booking.com by adopting BookingSuite, the potential for Accor is even greater when considered from a strategic perspective. Not only do they have another product to offer to potential owners, one that assuming they do a good job will also serve as a recruitment tool for franchises and management contracts, but finally they have some useful ammunition with which to fight the global OTA menace.
By allowing independents to be distributed through its electronic systems (online and mobile), Accor is eating away at one of the OTAs’ key differentiators – choice. By quickly and easily expanding the number of hotels offered in each key destination, the company is giving consumers a reason to check out its website and mobile presences, as the expanded product selection means the latter are far more likely to find a match with their travel needs, particularly in markets where Accor’s brand penetration is not high.
The big question is whether 10,000 properties will be enough? Even though this effectively triples Accor’s existing offer, and will be focused on 300 key cities, it pales into insignificance when compared with the 600,000 and 435,000 properties claimed by Booking.com and Expedia respectively. And what Accor may have underestimated is the substantial cost of getting hoteliers to sign up. Each of the major OTAs maintains extensive (and expensive) supply teams dedicated to finding and keeping inventory to sell.
With the financial aspects of the deal not yet public, it’s difficult to comprehensively assess the feasibility of Accor’s brainwave. But irrespective of what the actual commission figure eventually turns out to be, the resulting revenue will help refill the company’s war chest, giving it what it currently lacks – a sustainable source of revenue with which to fight its online marketing battle with the OTAs.
Thus all things considered Accor’s courageous move to transform itself into distribution channel for the independent hotelier looks highly interesting. Assuming that commission levels do actually turn out to be substantially lower than those of the existing OTA-based channels, independents are likely sign up for this new, low cost, source of business in their droves, reducing for the first time the stranglehold that Booking.com currently has over the European hotel sector.
*This story first appeared in Hotel Analyst Distribution & Technology. See www.ha-dt.com for more details.