Accor’s Top Digital Exec Reveals Data on Its Hotel Tech Game

Accor held a day of presentations for investors on June 27, and I wrote a piece covering 7 top slides from it. Today I want to highlight the most notable 20 minutes of the six hours of talks.

Alix Boulnois, chief digital officer, revealed how Accor is strengthening its digital foundations.

• Earlier this year, Boulnois joined Accor’s management board. The move underscored her importance at the Paris-based group, which runs 5,400 hotels and whose brands include Raffles, Fairmont, Ibis, and Novotel.
• Before joining Accor a few years ago, Boulnois spent seven years at Amazon, where one of her projects was to launch Prime Now grocery delivery.
• “I spent most of my career with big tech guys in the U.S., and they have a unique way to work and manage their teams — to deliver solutions and systems,” Boulnois said. “This is really what my leadership team has been trained to enforce within this organization.”
• She was previously a consultant at McKinsey. (Aren’t they all?)

Accor launched what it calls a “digital factory” at the end of 2021. What the heck is that?

• The unit brings together about 800 developers, data analysts, product managers, customer relationship experts, and others to tackle the problems of hotel guests and operators.
• “Accor has the only digital factory at scale in the hospitality industry,” Boulnois said.
• Boulnois has led this team to have a Silicon Valley attitude toward innovation.
• For instance, guests had a problem easily earning and burning points in the hotel group’s loyalty program. So the digital factory created an ALL-Accor Live Limitless payment card, thanks to an integration with tech company Fever. The card lets guests amass points on all purchases at Accor-affiliated properties, such as a meal at a restaurant, a spa visit, a co-working visit, or an overnight hotel stay. Guests can use the card to pay for services or book concert tickets through sales partners.
• D-Edge, a hotel marketing services unit for other hotel companies, is under the digital factory umbrella. It’s fairly rare for publicly held hotel groups to have a tech subsidiary. Only Choice Hotels has one, SkyTouch. D-Edge also manages The Accor Reservation System (TARS), the property management system used by most of the company’s economy hotels.
• The team is working to level up its customer relationship management. The goal is to improve how it tracks, and makes use of, data on guests as they stay across various brands in different countries booked through different methods.
• A tiny part of the group works on dreamier, long-term innovation focusing on social and environmental responsibility. One project is Fullsoon, a startup Accor created to predict restaurant occupancy rates to reduce food waste.

Accor, like its rivals, wants to sell more than just rooms.

• Within the past year, it’s launched “All Food” — sites and apps for booking meals at its restaurants — in select markets, such as France.
• In April, it launched Spa d’Accor for bookings in France, with plans to enter other markets.

Distribution is a challenge for all hoteliers. They all want to sell to more guests using the least costly sources possible.

• Since 2019, Accor has expanded its distribution channels by 27% to more than 140. In particular, Accor has been supplementing global online travel agencies like Expedia with more local partners and agencies in Southeast Asia, China, and Latin America.
• The team has improved the company’s mobile apps. Customer ratings of the apps are now between 4.6 out of 5 stars and 4.8 out of 5 stars across its Apple and Android apps, about 20% better compared with between 3 and 3.5 stars before the pandemic.
• The above two factors have helped Accor expand its share of direct bookings, which are typically cheaper for Accor than third-party bookings. The share of direct bookings (such as through its mobile app) as a share of all distribution rose 3 percentage points since 2019.
• Some of that direct growth is app-based. Pre-crisis, Accor’s apps drove 18% of its direct booking revenues. Now they drive 27%.
• In the past 12 months, the hotel group enjoyed a pace of growth for direct bookings that was four percentage points more than the pace of growth it saw from online travel agencies. If you compared direct bookings growth against online travel agencies lumped with global distribution systems such as Amadeus and Sabre, the company saw 7 percentage points more growth in direct bookings in the past year. (Speaking of Amadeus and Sabre, Accor wants to offer its special rates for loyalty members via those global distribution systems to boost activity.)
• Guests at the company’s luxury properties often expect high-touch service. (Fairmont drives about 12% of its business from contact centers.) Accor opened in December a new contact center in Barcelona to help.

Accor is leading its rivals on the subscription model.

• In March, Accor rolled out a subscription program worldwide where guests can pay an annual fee for discounts and perks. It also added regional programs in China and Brazil. While other companies have offered ways to buy higher levels of status in loyalty programs for a long time, Accor has five subscription products, more than its rivals.
• “We are super bullish on subscriptions,” Boulnois said.
• Subscriptions create an income stream and boost direct bookings, saving the company marketing costs and helping to subsidize the perks and discounts.

Most of Accor’s brand websites are outdated in look and functionality, in my view.

• Boulnois said she’s pushing for refreshed sites. Fairmont and Sofitel, among its high-end brands, will get contemporary sites soon.
• “We’re industrializing the model, which will enable us to release more and more new brand websites at an accelerated pace,” Boulnois said.

Accor’s skill at setting room rates has been below average, in my view.

• A key skill for any hotel company is “revenue management,” or setting rates and making rooms available in response to signals in supply and demand. In my view, Accor has been behind the sector average among major hotel groups.
• Boulnois said her team is making the latest revenue management software available to all of the company’s hotels with relevant predictions depending on brand, geography, and shifting macroeconomic conditions.

Loyalty programs are critical to hotel group growth, and Accor has been behind players such as Marriott and Hilton in running a popular and profitable rewards program.

• Partnerships are important. Some guests want to earn or redeem miles with partners, such as rental car companies, airlines, and taxi companies. Pre-pandemic, Accor’s loyalty program had about 50 partners. Now it has twice that number, or 108. In one example, guests in many markets can now book use points to book tickets to live events through a partnership with Fever.
• Through a mix of program improvements, rebranding, and heavy marketing, Accor touted gains.
• The company grew membership in its loyalty program by 40% since 2019, to 89 million members.
• Year-to-date enrollment in the program is up 107%.
• Mobile self-check-in is an appealing benefit that can help motivate loyalty sign-ups. Accor is at work having standardized tech across its hotel brands to enable keyless entry.
• It plans to offer more status match offers to travelers with high status in other travel programs as a cross-marketing tool.

Hotel companies need clean and unified data to take advantage of other tools and tricks.

• Like most hotel companies, Accor has a lot of its customer and hotel performance data siloed in different machines that don’t talk to each other well. That complicates data analysis.
• Boulnois knows this, coming from Amazon. Her team has finalized a plan to move Accor fully into the cloud computing era.
• “We’ll bring all our data together in a clean fashion,” Boulnois said.
• “We want to interact personally with our guests in a synchronized fashion across all of our touchpoints,” Boulnois said. “We’ve built a very strong partnership with Salesforce and Adobe on that front. The platforms are live, and we already see significant uplift, especially in our marketing activations.”
• The company’s central reservation system, a core piece of technology for accepting bookings, is “in the process of being replaced,” Boulnois said, without providing details. Will it replace The Accor Reservation System (TARS) with something its tech company D-Edge builds? Or is going to go back to a partner like Sabre to revamp its central reservation system?
• Moving systems from premise-based hardware to cloud-based platforms is critical.
• “Around 40% of our hotels will be on PMS [property management system] cloud by the first quarter of 2024,” Boulnois said. Accor’s total digital infrastructure is about half in the cloud already.
• “All of this will drive more speed, agility, and business value,” Boulnois said.

How does Accor’s digital revamp compare with what else is in the market? Subscribers to Skift Research can read the just-published Hotel Tech Benchmark: Digital Marketing and Advertising Tech 2023 report and the Hotel Tech Benchmark: Booking Engines, Website Builders, and Direct Booking Tools 2023 report.

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