The Accor hotel is one of the leading hotels located in France and a major hotel in Europe. It also happens to be one of the third largest hotels in the world. Over the years, the hotel has been forced to align its core competencies so that it can keep pace with the global changes taking place all over the world and the objective of providing key value and service in the hospitality industry (Accor, 2015). In effect, the Accor is considered one of the European leading hotels in the provision of services in the tourism and hospitality industry. It is also a global service provider for corporate service. Consequently, Accor has hired an approximate 150,000 employees all over the world in the countries that it operates, while offering its clients 45 years of expertise in the delivery service industry.
The activities of the hotel include operations in about 25 complimentary brands, ranging from budget to luxury. Among the brands that Accor operates in the United Kingdom’s upscale market is Sofitel, while the mid-scale brands are Novotel and Mercure. Its budget brands in the same region are Etap, Motel 6, and Formula 1. In the United States, the Accor hotel operates two budget brands; namely, Motel 6 and Red Roof Inns (Accor, 2015). The Pullman brand and the All Seasons brand are the other products offered by Accor as an effort to remain sustainable. The two products perform exemplary. For instance, there were about ten thousand rooms operated under the brand in the form of franchises as of 2010. Nevertheless, the remaining brands still match the corporate strategy of the hotel and are always innovative.
Marketing Considerations
Marketing considerations in the Accor hotel are guided by a host of factors. Branding and marketing are normally targeted at a range of customer segments in the hospitality industry. For instance, many companies started launching novel brands in 2009, with most international hotels opening up new brands targeting the Generation X consumers, while still struggling to remain acceptable to people of older generations (Accor, 2009). In the same year, Accor developed a marketing strategy that would reposition most of its brands. One of the ways that the company repositioned was through reinventing its strategies, developing new products, and developing new campaigns, among others. In effect, the marketing team was able to make these brands more successful, both locally and internationally.
Among some of the ways that the marketing team has been able to strategize is through attaining value in branding. Branding is a critical aspect of the hotel, as branding is done so that the hotel can increase its visibility and maximize its benefits in the industry. Through branding, the team can develop strategic branding guidelines applicable to every brand. This way, each product operates using specific standards regarding signage and collateral (Accor, 2009).
Another area that the company seeks to maximize the value of the brand and promote its visibility is through annual marketing campaigns. The corporate sectors of the Accor hotels are tasked with the responsibility of creating some functional campaigns throughout the year. This way, the campaign can drive the goals of the business, as well as create potential networks in the industry to help elevate its position. Notably, most of the campaigns that the company undertakes tend to be successful due to the high integration and effectiveness committed to them. Ideally, the campaigners collaborate with the strategic partners of the business through advertising, online activities, direct marketing, and carrying out national promotions to realize the maximum effects.
The third marketing aspect that the hotels consider is that of sponsorships. The Accor hotels are considered an industry leader in the sponsorship arena. Notably, the hotel boasts of a high profile portfolio in sponsorships, which are also good ways to support its brand. Among the areas that the portfolio operates is that of tourism, sports, and arts.
Financial Considerations
Financially, the Accor hotels are considered the largest operating hotel in Europe, with about 705 of the company sales coming from Europe. Notably, the highest revenues for the company come from the European region, followed by North America, Asia-Pacific, Latin America, and Africa and the Middle East. It is notable the company has chosen to increase its luxury brands to improve through constant branding, owing to the large revenue streams that the luxury brands bring.
Both the upscale and mid-range brands tend to generate a lot of revenue for the hotels. The company assets amount to about 6 billion dollars, and they comprise assets like land, buildings, fixtures, equipment, and furniture and constructions in progress. The large asset base of the hotel makes the management oversee both company-owned assets and the hotels under the lease. In effect, the management operates about 2,700 hotels through both owned and leased property management.
All these ranges of hotels for the business are hard to establish. Thus, most of the hotels attain their funding through the issue of commercial paper and funding from financial institutions in France. They also tend to get their funding both in both France and other international markets because Accor carries out global operations. Operating as a global company implies that the hotels are exposed to a high risk of economic changes, particularly changes in currencies. In effect, one of the ways that the company minimizes such shocks is through financing the assets and operating using the local currency of the country in which they are located.
This way, the hotels can exercise hedging and avoid the risk that comes with currency fluctuations. The hotel is looking to open about 609 new hotels and 104,000 rooms to boost its financial standing. Much of this expansion is to be done through franchises and operating management contracts, which account for 78% of the total expansion. Further, 48% of the company’s development is aimed at the Asia-Pacific region, with the company seeking to open about 100 new hotels in China and 20 in Indonesia. The company acquired 6,100 rooms in the Australia hotel as part of the acquisition process. Further, there are plans to open about 23 hotels in the Middle East.
There are key fiscal considerations that the company is taking to ensure high profits and limited cash outflows. These steps will ensure that the company reduces volatility in cash flows and minimize capital needs. In effect, some of the strategies the company applied between 2010 and 2012 included disposing of about 450 non-profitable hotels, reducing the company’s adjusted debt balance by 1.2 billion in between 2011 and 2012, and analyzing the performance of more hotels in 2012 and 2013 to help the company dispose of 175 more hotels.
Technical Considerations
Accor hotel seriously considers the digital transformation that has taken place all over the world. In effect, the company, in October 2014, announced that it would be undertaking digital transformations with the aim of consolidating leadership and offering a solid guest experience. In effect, Accor rolled out a 225 million Euros investment plan that would finance the initiative. This digital change was meant to foresee a response to the challenges emanating in the industry due to the digitization of everything (Accor, 2014a). Thus, Accor’s digital platform is centered on the customers, its partners, and the employees.
First, the company has developed an integrated plan that seeks to maximize guest benefits as a commitment to understating guests better. The right programs concerned with the provision of utmost guest service delivery and creating a good experience are the mobile-first, the customer-centric database, and a seamless journey for easy payment solutions. There is also the mice and B to B, an online booking service, an employee-friendly database to ensure easy check-in of guests, and the owner franchise center that will offer revenue and pricing solutions to the hotel partners (Accor, 2014a).
To ensure the functionality of the digital platforms implanted by the company, the company also seeks to consolidate the platform and its systems by making their performance agile. In effect, some IT programs will be implemented to facilitate the process. These include the infrastructure transformation program to ensure system maximization and business analytics and intelligence to ensure that operational decisions utilize hotel volumes.
Economic Impact
There is a need to have strategies that will help Accor remain safe from changing economic factors that could affect its profitability. Therefore, the global operations nature of the hotel makes it strive to ensure that it has various strategies and considerations to minimize the effects of possible economic problems. One of the things that the hotel does is to operate in the local currency of the country in which it is based. This way, Accor can shield its operations from the fluctuating currencies, as well as practice hedging.
The second consideration of the hotels is the creation of an economic cushioning that can protect the chain of hotels, even amidst tough economic crises. In effect, the hotel has made significant changes since the 2008 economic crisis (Accor, 2014b). While the group of hotels strived to maintain its strategic course, it also showed that it was able to respond and adapt to economic changes. Throughout the beginning of the year 2009, the hotel committed to adjusting to the economic order, reconfiguration of their organizational processes, carrying out cost reduction plans to minimize the effects of the crisis and developing innovative sales and marketing strategies. All this was to cushion a decline in sales and prepare the company for a rebound if a recovery happened.
Overall, Accor hotels have put commendable financial, marketing, technological, and economic strategies to spur growth and expansion. The strategies also ensure that the hotel is protected from any shocks occurring in these areas. Thus, Accor is considered the financial leader in the industry and a major sponsor in the marketing sector. The hotel is also economically ready to tackle economic problems, in addition to being technologically savvy because it keeps abreast of digital requirements in service delivery.
References
Accor (2009). Accor 2009 Annual Report. Web.
Accor (2014a). Accor launches new frontiers in hospitality. Web.
Accor (2014b). Enhancing your hotel experience 2014 Registration Document and Annual financial report. Web.
Accor (2015). Accor Hotels. Web.