In his first interview since becoming Accor's chief technology officer, Floor Bleeker explains the hotel giant's contrarian tech strategy. Expect top tech players and Accor's rivals to take notice.
Travel Tech Briefing
Editor’s Note: Exclusive reporting on technology’s impact on the travel industry, delivered every Thursday. The briefing will guide executives as they decide if their companies should “build, buy, or partner” to stay ahead.
Welcome to my first weekly backgrounder on enterprise tech! I’ve had the opportunity at Skift for nearly five years now to cover the rapidly changing landscape of technology in travel. I am hoping this weekly readout for you can offer some of my unique insights, and by you, I mean, executives, investors, and startup founders. I’ll look at how the shrewdest travel companies are using tech to gain an edge in operations, distribution, and marketing. I’ll report on which vendors are winning now — and which commercial and technical models are prevailing. Hopefully, by the time you are through reading my words each Thursday, you’ll come away with a new idea, or feel more emboldened about making a decision.
I am really happy that for my first briefing I had the chance to speak exclusively with the newish chief technology officer, Floor Bleeker, at Accor. Unlike most other hospitality groups, Accor is taking a contrarian strategy to enterprise tech. I got the lowdown on the Paris-based giant’s decentralized approach from CTO Bleeker in his first media interview since he stepped into the role in November 2020.
- Accor — whose brands include Sofitel and Raffles — wants to use technology to further speed up its net supply growth of lodging units, among other goals.
- Yet the group has been on a decade-long acquisition streak. So it has collected several brands with different software needs.
- Rivals such as InterContinental Hotels Group, The Peninsula Group, and Wyndham have been simplifying their technology stacks into one or two core systems with the help of partners such as Amadeus, Sabre, Shiji, and Oracle Hospitality.
- Upstart lodging operators such as Life House, Limehome, Mint House, and Sonder are encroaching on traditional hotel operators’ turf. The startups claim their unified, cloud-based tech stacks makes them more cost-effective as operators.
Accor has taken a contrarian path, abandoning its plan to centralize its core technology systems.
- Many of its brands use its in-house, centrally hosted central reservation system called The Accor Reservation System (TARS). Before the pandemic, Accor debated replacing it.
- In 2018 and 2019, Accor considered setting up a joint venture to create a unified system with Sabre, the travel tech company based in Southlake, Texas. It wanted a replacement for TARS that was cloud-based and would manage room inventory, pricing, and hotel operations. The new platform would combine what’s known as a central reservation system, or CRS, and a property management system, or PMS.
- The project would’ve been very expensive, analysts said.
- Accor said this week it had “halted” the project.
- “Since November, we’ve been re-evaluating our PMS and CRS strategy because combining them is not an option in the short-term,” Bleeker said.
- “We’ve decided to allow many PMSes rather than follow our industry’s traditional path of the brand mandating a system,” Bleeker said. “Properties in different countries with different categories of service may be best served by one PMS and maybe not so well by others. A limited service hostel brand, for instance, may need a PMS that assigns by bed rather than by room.”
- It’s not a free-for-all, though. Accor has only certified a handful of property management systems, such as Mews. It wants systems with top-tier data security practices, standardized data, and compatibility with its group-wide distribution and loyalty program systems.
- Accor manages hotels on two property management solutions. One is an internal product known as FOLS, and the other is Oracle Hospitality’s Opera.
Accor takes a case-by-case approach when answering the classic “build, buy, or partner” question.
- “The decision to build, instead of buy, is mainly for those functionalities that are very differentiating, such as our websites, our apps, and our loyalty program, that we cannot buy off the shelf,” Bleeker said. “As an asset-light company, we prefer to buy services unless it’s for a function that sets us apart in the market.”
- Years ago, having a custom central reservation system (CRS) gave a brand a distinctive edge, Bleeker said. But now that kind of system is more of a commodity.
- So Accor has recently had a reorganization. D-Edge, its hotel marketing services unit for other companies, now manages The Accor Reservation System (TARS). D-Edge maintains a separate, similar central reservation system that it sells to other hotel companies, mainly independent hotels and smaller chains.
- In July, Accor led a round of investment in Treebo, an Indian startup that offers cloud-based hotel management software. Accor has deployed the software at a scattered number of its more limited-service properties.
“Coping with multiple property management on a single central reservation system is okay,” Bleeker said.
- “But for something like CX [customer experience], we will do the lead design work in-house,” Bleeker said. He referred to a stealth “CX” project run by Accor’s “digital factory” under the leadership of Alix Boulnois. This is a new generation of customer relationship management, or CRM, software.
- The group sees this customer relationship management system as an in-house priority. Thanks to recent improvements, the software is now better able to track data on guests who may stay across various brands in different countries booked through different methods and to target customer segments with relevant marketing.
Accor will continue to partner with hotel tech vendors opportunistically.
- Earlier this year, it signed a deal with Spanish startup StayMyWay, hiring it to provide mobile key technology at its 5,000 properties. StayMyWay works with many lock providers. Existing properties will be strongly encouraged to upgrade to the standard when possible.
- StayMyWay’s technology lets hotel guests gain access to their rooms without stopping at the front desk. Guests take a picture of themselves and their passport or another identification document using their smartphone. The company uses technology to verify the guest’s identity and issue a key to a room.
- Before joining Accor, Floor was a tech leader at Mövenpick Hotels & Resorts and at Jumeirah.
- Based on his past experience, he wants Accor to set global brand standards that prepare it for whatever “internet of things” amenities, such as smart locks or voice-activated devices, become the agreed-upon must-have a few years from now.
Accor, which runs 762,000 guest rooms, need not fear tech-first startup hospitality brands such as Sonder, which aims to run 8,000 units by end of the year, Bleeker said.
- “There’s a space for those brands, as our investment stake in Treebo highlights,” Bleeker said. “But becoming a big hotel brand involves a lot more than technology. I’m a technologist, and I love what these brands have done with technology. But the execution challenge of consistently delivering a human experience that customers cannot find anywhere else is very hard to do at scale.”
- “Accor is rooted in human values and has a true passion for service and believes in the power of human relationships,” Bleeker said. “This is very important. Technological solutions will allow us to reinforce human services rather than replace them.”
- Bleeker is focused on hiring the best talent. That is one area where these smaller companies may have done a somewhat better job in the past than Accor has. He said the company’s recruitment game has improved under his watch.
Some analysts have praised Accor’s tech transformation, favorably comparing its tactics to heavyweights outside of travel in legacy businesses — such as BBVA, Siemens, the New York Times, and Leo Pharma — that have done digital transformations.
- But others remain skeptical of the hospitality company’s tech moves. The company has long promised to find new lines of revenue by selling incremental services and by boosting the frequency of its contact with its customers. It’s progress has been mixed, analysts said.
- In 2017, the group launched a mobile offering called AccorLocal that would let residents who live near an Accor property access the hotel’s services, such as its gym, or the services of local artisans and companies. The company has put AccorLocal “on stand-by” during the pandemic. It plans “to reinitiate it in the coming months as things get back to a new normal,” a spokesperson said.
- The group attempted a few years ago to make properties run by independent hoteliers available through its branded booking engine. That fizzled.
- Accor still believes it can sell more than stays by upselling guests with services — whether it’s a meeting space or a sightseeing tour. But it’s competing with better-capitalized travel re-sellers at that game.
- One big X factor: Will the blank check investment vehicle Accor Acquisition Company buy a tech company? As of last week, Goldman Sachs held 10.75 percent of the capital and voting rights in the blank check company, expecting a significant merger with a target, tech or otherwise.
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