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Accor SA, Europe’s largest hotel operator, plans to spend 225 million euros ($280 million) through 2018 to improve its digital presence as web-based services pose a growing threat to earnings.
The owner of the Sofitel and Ibis brands agreed to buy French app-maker Wipolo and plans to improve customer access via mobile devices and revamp its online booking websites and employee platforms, the Paris-based company said in a statement today.
Hotel companies including Accor are struggling to win customer loyalty as online travel agents such as Priceline Group Inc. push down room prices and take commissions on bookings. Accor in January said it hired Vivek Badrinath as deputy chief executive officer to revamp Accor’s online strategy.
“All our stakeholders, customers, employees and partners, will benefit from this wide-reaching digital transformation,” Badrinath said in the statement. The strategy is “built around migration to mobile devices, a more personalized service and a seamless customer journey.”
Online travel accommodation sales grew 12 percent in 2013 to $169 billion, with almost half coming from intermediaries such as Expedia Inc., according to Euromonitor International. Sales will climb to $274 billion by 2018, the market researcher estimates.
“Online travel agency sales are growing very fast and this is becoming an issue for hotels,” said Angelo Rossini, online travel analyst at Euromonitor. “The effort from hotels is to try to increase the percentage of direct sales.”
Wipolo is a mobile app that allows users to plan trips by booking flights, hotels and restaurants, and to share information about their trips with friends.
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