Introduction
Accor Hotel Group (AHG) is a world-leading hospitality enterprise with several unique strategies. It has 5,300 hotels, 10,000 food, and beverage venues, over 40 brands, and employs over 260,000 people across 110 countries (Accor, 2022). AHG is one of the industry’s most diverse and integrative hospitality ecosystems and a market leader in the extended-stay and branded private residences segments (Accor, 2022). Overall, this company remained highly successful even after the onset of the COVID-19 pandemic.
Company Mission
The company positions itself as people- and sustainability-oriented, embracing diversity and growth. AAHG’s mission is to “make the impossible possible to realize [one]’s dreams” (“Who we are,” 2021). AHG holds the values of guest care, trust, respect, sustainable performance, and innovation (“Who we are,” 2021). Overall, AHG promotes professional entrepreneurship, supporting guests and employees while staying committed to environmental protection.
Company Vision
AHG’s vision is intimately linked with its mission of holistic service. The company’s vision is to act daily to embrace experience-driven and sustainable tourism facilitated by digital technologies (Accor, 2022). The AHG enterprise focuses on creating wealth sustainability and limiting its negative impact by showing its commitment to climate change issues (“Our vision: Acting here,” 2022). Overall, AHG is building towards transforming the future of the sustainable hospitality industry.
Alignment of Programs and Services
Through its initiatives, AHG coordinates its aims of driving positive action through appropriate programs. The most notable action areas include ethics, responsible tourism, environmental sustainability, community engagement, diversity, and inclusion (Accor, 2022). For instance, the ‘Too Good to Go’ initiative, fighting against food waste, is currently implemented in 900 hotels, spanning 11 countries (“Accor Overview,” 2022). By 2021, AGH introduced the ‘Planet 21 – Acting Here’ program, incorporating sustainability hotel-level changes and acknowledging individuals as main players in achieving its vision (“Our vision: Acting here,” 2022). In 2020, Accor developed a climate trajectory compatible with the global goal of reducing global warming (Accor, 2020). Moreover, in 2020, AHG established the ‘ALL Heartist’ solidarity program for employees most affected by the health crisis (Accor, 2020). Therefore, AHG’s services and programs align with their spirit and practice.
Executive Leadership
Communication Plan
AHG’s leadership model is based on creating effective communication channels at the individual, facility, and global levels. The company continuously optimizes its teams, which is enabled by offering employees extensive training opportunities and leveraging a high-audience digital ecosystem (Accor, 2022). Moreover, the emphasis on innovation is visible through an executive commitment to finding the most effective online communication tools and establishing integrated digital systems connecting hotel databases (Accor, 2020). AHG’s leadership strategy is employee-oriented, empowering each hotel to execute its vision.
Alignment with Team and Vision
In line with its social commitments, AHG leadership focuses on sustainable development. For instance, AHG placed a €700 million inaugural bond issue indexed to its sustainable development goals, a coupon indexed specifically to AHG’s carbon emission reduction goals (Accor, 2022). AHG also recently appointed a Sustainable Development Director, who joined the AHG Executive Committee (Accor, 2022). AHG’s executive leadership is aligned with its vision, with all management levels constantly improving to devise optimal solutions.
Risk Factors
There are several risk factors that the company may encounter throughout its operation. The AHG itself identifies two risk categories, risks related to the business environment and the business model. The first category includes unfavorable geopolitical, health, or economic changes, such as the COVID-19 pandemic, malicious attacks on the integrity of digital personal data, and non-compliance with standards, laws, and regulations (Accor, 2022). The second category includes the integration of acquisitions and the unavailability of digital operating data (Accor, 2022). However, while these factors render AHG prone to losses, it has handled them well.
Leadership Strategy
Organizational and Environmental Context
In the increasing demand for ‘green businesses,’ AHG has been embracing sustainability requirements. AHG was the first hospitality enterprise to create an environment department in 1994 and continues to seek technology and managerial strategies to improve (“Our vision: Acting here,” 2022). The company focuses on reinforcing its market positions in locations they already dominate, such as Europe, the Americas, and the Asia Pacific (“Accor overview,” 2022). AHG’s elected leadership strategy is flexible and innovation-oriented, incorporating solutions at all levels.
Long and Short-Term Goals and Strategy
As the company enters the recovery phase, it can get back to expanding. The AHG strategy accelerates hotel development by acquiring new venues and organic growth, creating several objectives (“Accor overview,” 2022). The company strives to attract and retain extant partnerships, accelerate growth, optimize its business model, and promote positive hospitality (Accor, 2020). AHG created an action plan to promote sustainable development, which entailed creating a four-level rating, which would be issued individually to each hotel depending on each facility’s progress (“Our vision: Acting here,” 2022). Overall, this approach encourages positive change in each hotel and communicates a clear picture of sustainable development for the guests.
AHG’s long-term goals entail sustainable and effective development and expansion. First, AHG seeks to increase its brands’ reputational appeal across all market segments and expand its global presence (“Accor overview,” 2022). Moreover, AHG aims to utilize technology to enhance hotel connectivity (“Accor overview,” 2022). Lastly, AHG strives to accelerate its transition toward sustainable growth and affirm its environmental and social values throughout the entire service chain (Accor, 2022). Furthermore, the short-term goals include eliminating all guest-related single-use plastic items across all hotels, building low-net carbon buildings, and achieving net-zero carbon emissions (“Accor at a glance,” 2022). Overall, AHG’s goals aid it in progressing technologically and ethically.
Recommendations for Improvement
Despite all the steps already undertaken by AHG, there is still room for progress. Tan et al. (2018) recommend improvements in customer service and security and the increased support of accountability, metrics of performance, and efficiency measurement at all levels. Therefore, AHG should continue developing its hotel ranking methodology and uphold the hotel-level performance reviews. Moreover, like with any large enterprise, preventing operational mistakes is key to successfully running a business. Hence, AHG should continue its path of digitalization and automatization to achieve its goals.
Summary
Annual Report Analysis
Despite the challenges and shortcomings of the past years, AHG enjoyed an overall sequential rebound in business. In 2021, the room booking rates came close to or, in many locations, even exceeded pre-COVID-19 levels (Accor, 2022). The revenue per available room (RevPAR) has been improving monthly (Accor, 2022). During the 2021 fiscal year (FY), AHG opened 288 hotels, resulting in a net annual network growth of 3%, and reported consolidated revenue of €2,204 million, which exceeded the 2020 FY by 34% (Accor, 2022). The business recovery from the COVID-19 pandemic’s consequences was confirmed in January 2022 and should continue in the second half of the year (Accor, 2022). The FY 2021 report results show that the company has secured its dominant place in the market.
Next Steps Towards the Future
With business recovery, the company may now transition back from COVID-19 ‘survival mode’ to further development. AHG can resume allocating resources to acquisitions, which were temporarily halted during the pandemic (Accor, 2020). The future acquisitions will further tap into the luxury and upscale market segment, with as much as 40% of new openings (Accor, 2022). For 2022, AHG expects a net unit growth of approximately 3.5% in its assets (Accor, 2022). Overall, the next steps that AHG undertakes will align with its development and sustainability aspirations.
References
Accor. (2020). 2020 Integrated report (pp. 1–77) [Universal Registration Document].
Accor. (2022). Full-year 2021 results: Significant rebound in activity confirmed in 2021 (pp. 1–16) [Press Release].
Accor at a glance. (2022). Accor Hotel Group.
Accor overview. (2022). Accor.
Our vision: Acting here. (2022). Accor.
Tan, L. Y., Lai, J. H., Lee, S., & Chew, W. S. (2018). Analyzing the relationship between financial variables and market risk in the tourism industry. Social Science Research Network.
Who we are: Traditional hospitality and beyond (2021). Accor Careers.