Accor recently rebranded its loyalty program under the phrase "Live Limitless." The company needs to replace its limited technology structure to meet that ambition, and this deal represents a huge commercial win for Sabre.
Accor said it’s agreed to embark on a pilot project with Sabre to build software to run its properties, marking the first global hotel enterprise client for the technology giant based in Texas that does much of its business with airlines. Sabre’s largest enterprise client to date has been Wyndham.
Paris-based Accor, whose brands include Sofitel and Raffles, wants to switch from its internal system, called TARS [The Accor Reservation System], to Sabre Hospitality’s Synxis brand of tools, including a central reservation system and a property management system in a cloud-native platform.
“The deal looks similar to the Amadeus IHG deal in both the content but also with the hotel company being a pilot partner with the hope the software, once proven, can be rolled out to other hotel companies,” wrote Richard Clarke, an analyst at Bernstein, in a note to investors.
The pilot suggests that Accor has an ambition for faster growth.
“IHG have achieved faster unit growth since signing with Amadeus,” Clarke wrote. “Accor will hope to repeat this success.”
The move also represents a blow to Amadeus, which had hoped to win more hotel groups over to its comparable offering after last year having successfully transferred IHG (International Hotels Group) properties off an old, internal system onto a new platform.
Sabre’s Biggest Hospitality Project Yet
For years, hospitality technology has broken down into two broad camps: the property management system, which is typically a room-based database used for on-site operations such as checking guests in and out, and the central reservation system, which helps hotels distribute their rates and inventory and track bookings.
These systems often have been built differently with poor connectivity, meaning that they often don’t play well together. Most property management systems are also built with on-premise technology, rather than internet-based, or cloud, technology that can be more nimble.
Sabre aims to unify the property management system and the central reservation system.
Accor believes it can sell more than just stays in rooms, and so it needs a technology system that can handle the upselling of varied services, whether its a group booking of a meeting space or a sightseeing tour.
“It’s a new guest experience to book a room,” Accor Chief Information Officer Gilles de Richemond told Skift. “If you need a large bathroom or want to be close to the restaurant, you can choose the service you need.”
Sabre has other services that Accor might want to add if the pilot is successful, said Justin Ricketts, senior vice president, software development and interim president of Sabre Hospitality Solutions, in an interview.
Sabre has a so-called intelligent retailing service that includes the concept that the company calls “infinite SKUs [stock keeping unit]. Ricketts described this as the ability to market, distribute, and fulfill the sale of any product, service, or experience in compliance with various custom rules or policies that might vary by selling channel. This can also provide so-called attribute-based selling, or a new way of selling hotel rooms online.
Ricketts said the Sabre team size will expand to support the pilot.
Since CEO Sébastien Bazin took over in 2013 he has divested the company of much of its real estate to focus on ways to boost profitability and growth, such as by expanding its portfolio of brands and investing heavily in technology, such as through its D-Edge subsidiary.
Richemond said the partnership will help the company grow and streamline processes.
“Its easier to operate,” he said. “We will be able to onboard new hotels much faster.”
Accor has until now built a lot of its tech in-house with the help of minor acquisitions. Under Bazin, the company has retooled its customer relationship management system to be able to better track data on guests who may stay across various brands in different countries booked through different methods and to market to segments of these customers more relevantly.
For context, Skift Research subscribers can read a report this week titled The Hotel Property Management Systems Landscape 2020.
Data migration efforts like this can be akin to open heart surgery. Amadeus received praise from IHG for handling its platform shift with minimal disruptions.
If Sabre stumbles in the pilot, others will be eager to try to swoop in and scoop up the business. Earlier this year, Amadeus lost Premier Inn as a client, and is eager for a win. Oracle Hospitality is also pushing hard to win more hotel giants for enterprise software deals, as we reported this week. Shiji also wants to serve such customers.
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Photo credit: An image of a hotel that's part of the Accor Group portfolio, the Peppers Blue on Blue Resort on Magnetic Island in North Queensland, Australia, that belongs to the Mantra brand. Accor is doing a pilot test with technology vendor Sabre for a major overhaul of its digital systems. Accor