Accor Group in Travel and Tourism - World

February 2011

Scope of the Report

Travel and Tourism: Accor Group

© Euromonitor International

Scope
• This global company briefing forms part of the wider travel and tourism research that covers the following categories:

TRAVEL AND TOURISM

Tourism flows and spending

Travel accommodation

Transportation

Car rental

Travel retail

Tourist attractions

Health and wellness tourism

Disclaimer Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies’ opinions, reader discretion is advised

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Travel and Tourism: Accor Group

© Euromonitor International

Strategic Evaluation Competitive Positioning Category and Geographic Opportunities Brand Strategy Operations Recommendations

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000 annual new room openings.Strategic Evaluation Travel and Tourism: Accor Group © Euromonitor International Key company facts Accor Group Headquarters: Regional Involvement: Strong portfolio • Accor Group is a major global group in hotels. China. Novotel. Mercure. • Accor is emphasising the asset-light operating structures within its luxury and mid-scale hotels. Accor had over 4.6 billion cash proceeds from the restructuring of the properties through which it plans to adjust its current debt.100 hotels in 90 countries. The company expects 450 hotel assets to be restructured between 2010 and 2013 and achieve 40. the world's largest region for hotels. Pullman. is its core region. MGallery.Sofitel. Accor aims to record EUR1. Main brands are . Western Europe. All Seasons. Etap Hotel. 4 . India and UK throughout 2010. Formule 1. with nearly 500. Ibis. Interest in emerging markets • Aggressive development plans were launched by Accor in Brazil. 2. Suitehotel.000 rooms. Accor also introduced an annual EUR200 million investment plan to support selective regional developments. Accor has a diverse portfolio of brands from luxury to budget.9% 3. hotelF1 and Motel 6. • The French company is one of the leading hotel chains in Europe.8% Aspirations to become a leader in Europe • The demerger of its vouchers business in 2010 strengthened the company‟s focus on the hospitality sector. travel retail services for leisure and business travellers. providing France Global Category Involvement: World hotel value share (2010): World hotel value growth (2010): Hotels. As at June 2010.

Suithotel.Strategic Evaluation Travel and Tourism: Accor Group © Euromonitor International Brand portfolio • Over the years. as it targets leisure tourism from different destinations. Etap Hotel. It does so by improving customer knowledge and strengthening loyalty programmes. Novotel. Adagio All Seasons. MGallery Mercure. The changing marketplace from 5-star dominated demand to a wider market creates scope for mid-range hotels. Pullman. The company is present in 90 countries around the world. Ibis Etap. Formule 1. Novotel. • Mid-range and budget accommodation offer attractive options for the company. Accor has managed to develop distinctive brands. Main brands are . which are differentiated from each other and from those of its competitors.Sofitel. MGallery. Studio 6 5 . hotelF1 and Motel 6. Adagio. hotelF1. Suitehotel. Accor Group Brand Portfolio 2010 Price platform Luxury Brand Sofitel Upscale Mid-scale Economy Budget Pullman. Motel 6. Mercure. All Seasons. Formule 1. Ibis. • Accor has a department which is entirely dedicated to making its brands more easily identifiable and increasing their visibility.

Germany and the UK.6% over 2010-2015 as both business and leisure travel recover from the crisis.Strategic Evaluation Travel and Tourism: Accor Group © Euromonitor International Financial assessment • The results for year ended 31 December 2010 for Accor showed signs of a recovery with hotel revenues registering EUR5.948 -2.48 -5. due to an increase in inbound tourism flows and business travel to the country. Major factors affecting these results were the expansion development projects which boosted revenues by EUR75 million. contributing to the financial improvement particularly in European markets such as France.490 2. and continue to diversify our operating structures through franchising and management contracts. the strategy of asset-light approach of the hotel operator which decreased corporate debt significantly and its focus on the budget and mid-priced customer base.693 million.91 -2. which also led to improved average room rates. Chairman and CEO 6 . In those destinations. occupancy rates increased. • The French market performed particularly strong. Hotel value sales are expected to remain dynamic over the forecast period. Accor Group Key Financial Indicators 2009/2010 EUR million Revenue Operating margin (%) Net margin (%) 2009 5. up 10% from the same period the year before.” Denis Hennequin. • The cost-saving plan introduced in 2009 and the strong growth in economy hotels outside the US further contributed to these operational results. • The upscale and mid-scale segments were major performance winners for Accor.25 2010 5. growing at a CAGR of 3.37 Source: Company reports Note: Revenue consolidated and restated to account for demerger and disposals “Our common goal will be to increase the value and visibility of our brands. speed our development.

5 64.2 73.9 77.1 57. as at 31 December 2010 RevPAR subsidiaries 75 58 64 74 45 60 71 Occupancy (%) subsidiaries 64.4 ADR subsidiaries 116 89 95 102 79 99 92 7 .9 67.Strategic Evaluation Travel and Tourism: Accor Group © Euromonitor International RevPar performance for upscale and mid-scale brands Accor Group Hotels Performance Upscale and mid-scale hotels (local currency) France Germany Netherlands Belgium Spain Italy UK Source: Company reports Notes: Includes VAT.8 60.

1 42 8 .6 65.2 72.8 68.0 72.6 54.5 73.Strategic Evaluation Travel and Tourism: Accor Group © Euromonitor International RevPar performance for economy brands Accor Hotels Performance Economy hotels (local currency) France Germany Netherlands Belgium Spain Italy UK RevPAR subsidiaries 38 40 56 50 29 42 39 Occupancy (%) subsidiaries 69.3 ADR subsidiaries 54 58 77 69 53 65 54 US Source: Company reports Notes: Includes VAT. as at 31 December 2010 25 61.

adding 16. Strengths Weaknesses Opportunities Threats Asia Pacific • With 70 new development Largest franchisor • Focusing solely on Credit availability • New build hotels are Oil price fluctuations • Rising oil prices will put contracts in Asia Pacific in 2010. If consumers remain cautious and businesses continue to curtail travel this could have a negative impact on the company‟s performance. which in turn could damage the speed of the economic recovery – especially consumer spending. upward pressure on global inflation. development strategy. which capitalises on growth opportunities in Asia Pacific and Middle East.000 hotel rooms to its portfolio. overleveraged financial systems will see slower growth than emerging markets. there are opportunities for Accor to become Europe's largest franchisor through further expansion. contributing to Accor‟s high-profile presence in emerging regions. Accor‟s exposure in the US and Europe makes it more vulnerable to economic turbulences. This provides competitive advantage to attract a wide customer base and diversify its offerings. tourism following the demerger of its voucher business. which were relatively untouched by the economic crisis. travellers can negatively impact Accor. This can impact the demand for Accor‟s hotel offerings. 9 . mainly due to the strong dependence on credit availability and an investor‟s willingness to enter into credit agreements. Accor has strong competitive advantage to continue growing in the region. expected to struggle in the short term.Strategic Evaluation Travel and Tourism: Accor Group © Euromonitor International SWOT – Accor Group Balanced hotel portfolio • Accor features a diverse Pipeline projects • Strong pipeline Big exposure in the US and Europe • Mature markets with Business travel demand • Reliance on business brand portfolio operating in different market segments.

brings major challenges • • • • which can be currency risk in markets where the company is highly exposed. due to a difficult operating environment. • Social media boosting customer contact. In Russia. key area for chain Double dip? • Rising fuel prices impacting industry. Accor is following its development plan through franchises. the destination remains a challenge for the company. Latin America is a case in point. thus. Hotels expansion has remained slow due to high real estate prices. They have used different strategies to maintain the occupancy rate at the highest possible level. Accor has invested heavily in economy travel accommodation. One of the measures adopted. Improved 2010 • Strong pipeline development. Hence. • Reliant on business recovery to maintain expansion. Accor has experienced difficulties in developing its brand. • Room for growth. where currently.Strategic Evaluation Travel and Tourism: Accor Group © Euromonitor International Key strategic objectives and challenges • The strategy adopted by Accor. Occupancy rates have been the major concern for hotels in 2010. • Investment in economy brands. It aims to become a leading hotel group by number of rooms and Europe's largest franchisor. 10 . which embraces a focus of a stand-alone hotel business. Corruption and excessive bureaucracy deter many foreign investors from operating in the country. franchising became the main way for chained hotels to develop quickly and with reduced investments. was the lowering of price per room. loyalty and feedback. premium travel and higher revenuegenerating sales. with a strong focus on the budget market. Accor generates more than 40% of its operating profit.

Travel and Tourism: Accor Group © Euromonitor International Strategic Evaluation Competitive Positioning Category and Geographic Opportunities Brand Strategy Operations Recommendations 11 .

Accor Value Sales Performance vs Global Hotels Industry 2006-2010 20 % y-o-y value growth 15 10 5 0 -5 -10 -15 2006 8. Low-cost brands • The economic slowdown did not impact the performance of economy brands Ibis and Formule 1 mainly because of their accessible prices.9 2009 -10. • This has led to Accor outperforming the global hotels industry in 2010. Demerger and divestment of assets helped the French operator to minimise its debt and generate cash reserves to withstand the impact of the economic crisis.2 13. Germany and Britain gradually improving in 2010 and business travel and luxury demand increasing.5 3. Budget hotels benefited from the economic downturn.1 2008 5.9 2010 3. Pure hospitality focus • Accor streamlined its business activity to a stand-alone hotel business in 2010 in pursuit of a steady growth strategy. as consumers traded down and avoided luxury hotels.9 2007 12. the performance of Accor‟s upscale and mid-scale hotel revenues stabilised as well.7 -10.Competitive Positioning Travel and Tourism: Accor Group © Euromonitor International Global competitive performance Recovery in Europe • With the economies of France.2 10.3 13.8 12 Global Hotel Industry Accor .

0 4. 2008 2009 2010 Global pipeline • Accor‟s expansion in 2010 has     8 7 10 7 8 10 7 8 10 7 8 9 10 7 8 9 10 1.Competitive Positioning Travel and Tourism: Accor Group © Euromonitor International Global ranking Hotels Top 10 Global Companies by Value 2006-2010 5-year share trend       % share 2010 5.9 2006 2007 Strong brand portfolio • The deteriorating economic Company name Marriott International Inc Hilton Worldwide InterContinental Hotels Group Plc Accor Group Starwood Hotels & Resorts Worldwide Inc Wyndham Worldwide Corp Choice Hotels International Inc Best Western International Inc Hyatt Hotels Corp Carlson Cos Inc 1 3 4 5 6 1 3 4 5 6 1 3 4 5 6 1 2 3 4 5 6 1 2 3 4 5 6 environment and escalating operational costs were the main factors influencing the introduction by Accor of a “asset light” strategy in 2010.5 1.8 0. 13 .5 1. • For the year ended 31 December 2010. China. Accor opened 214 hotels and 24. through management and franchise contracts. • Strong occupancy rates and brand awareness particularly in Europe along with increasing demand helped maintain Accor‟s good performance. the company has managed to minimise the impact of the downturn.7 2. India is expected to increase Accor‟s market positions in those destinations.9 2.0 3. Aggressive pipeline development particularly in Brazil. Russia/CIS and Morocco are considered important emerging markets targeted by Accor.7 boosted sales growth. With the majority of its brands positioned as budget and mid-scale.800 rooms.5 0.

as its economy proved resilient to the global economic recession thanks to great financial flexibility and improvements in commodity prices. an emerging middle class and investment will drive the economy of Latin America.000 120. Accor Group Hotels Presence and Growth Prospects by Region 2010-2015 16 14 % CAGR 2010-2015 12 10 8 6 4 2 0 -20. strong value growth is likely to derive mainly from Asia Pacific and Latin America.000 0 North America Asia Pacific Middle East and Africa Latin America Eastern Europe Western Europe Australasia 20.Competitive Positioning Travel and Tourism: Accor Group © Euromonitor International Regional performance • Western Europe remained a core market for Accor in 2010. • Increasing consumer spending. Nevertheless. where it generates the bulk of its hotel revenues. as Accor increases its hotel penetration in these regions.000 40.000 Regional Market size US$ million 2010 Bubble size shows company share of region in 2010 14 . Brazil is the rising star.000 100.000 140.000 80.000 60. which left travel and tourism unscathed.000 160.

2 8.6 100.3 29.1 6.484 % share of rooms 43.0 15 .Competitive Positioning Travel and Tourism: Accor Group © Euromonitor International Upscale and mid-scale hotel global footprint Accor Hotel Rooms 2010 Upscale and mid-scale hotels France Germany Netherlands Belgium Spain Italy UK TOTAL Source: Company website Note: As of December 2010 Number of rooms 27.8 4.6 5.5 2.541 64.802 2.649 3.528 1.988 5.898 19.078 3.

552 9.0 6.8 3.6 1.013 73.934 15.2 1.0 16 .414 2.639 4.3 1.Competitive Positioning Travel and Tourism: Accor Group © Euromonitor International Economy hotel global footprint Accor Hotel Rooms 2010 Economy brands France Germany Netherlands Belgium Spain Italy UK US TOTAL Source: Company website Note: As of December 2010 Number of Rooms 39.898 1.160 2.3 100.403 149.8 10.013 % share of rooms 26.0 49.

Competitive Positioning Travel and Tourism: Accor Group © Euromonitor International Hotel openings in 2010 Europe North America 56 hotels 42 hotels Middle East and Africa Asia Pacific Latin America 7 hotels 27 hotels 10 hotels Source: Company website Note: January.November 2010 17 .

Travel and Tourism: Accor Group © Euromonitor International Strategic Evaluation Competitive Positioning Category and Geographic Opportunities Brand Strategy Operations Recommendations 18 .

Accor.Novotel. • The company‟s presence in the country is quite strong. The company intends to introduce other brands in the market. Jakarta and Bangka. the country continues to represent huge opportunities for businesses. Balikpapan.Category and Geographic Opportunities Travel and Tourism: Accor Group © Euromonitor International Asia Pacific . India • In India. Being a large. Surabaya. 19 . in Vietnam. the French company is planning to invest US$130 million to reach 50 hotels by 2012. Zhuhai and Huizhou. by 2011. Pullman. • Accor. Changsha. Denpasar.a priority China and India • Accor added 25 new contracts in the luxury to mid-scale segments in China during 2010 under some of its brands - Sofitel. is expected to open eight new hotels across Indonesia before the end of 2012. Ibis and Mercure. Other Asia Pacific • Major hotel chain.000 rooms. Manado. • Early in 2010. already 60 hotels were under contract to be built. Its portfolio of brands comprises 23 luxury hotels.500 rooms in 42 cities. • India was relatively untouched by the economic crisis. by 2013. is keen to enhance its presence in China and in particular second. with 100 hotels and 26. By December 2010. Novotel and Mercure. in cities such as Guiyang. the company outlined its aim to launch 90 hotels by 2015 in India. with 2.and third-tier cities. • The company also announced that it will develop 12 more hotels. such as Sofitel. however. • This major expansion will be expected to increase its value share and surpass some of its main rivals in the hospitality industry. dynamic economy with an expanding middle class and rising income levels. 18 mid-scale hotels and 44 economy hotels. Three major brands are operating in the country under the umbrella of Accor . 15 upscale hotels. The new hotels will be opened in Padang. Pullman and Formule 1. Kuta. which Accor aims to take advantage of.

Saudisation became compulsory for all major companies in the country. and Ibis Aleppo Taj Halab in Syria is to be launched in 2014. which is significant for attracting hotel chains such as Accor. Accor operates nine hotels and has long-term plans to add 15 new properties over the next five years. Another key trend. In 2010. Other pipeline projects include Bahrain (2 hotels) and Saudi Arabia (2 hotels) and Syria (3 hotels) creating 1. 20 . This was stimulated by the thriving banking sector with an increasing number of investment banks opening in the Kingdom and servicing high net worth individuals and corporations in the region. four hotels are expected to be opened by 2012. is the fast growing business environment in the Kingdom fuelled by the new economic cities to be built. the French company opened Sofitel Al Khobar The Corniche.Category and Geographic Opportunities Travel and Tourism: Accor Group © Euromonitor International Middle East – ripe for opportunity • Accor plans to open five Ibis hotels across the Middle East. • One of the major challenges faced by Accor in Saudi Arabia is the stringent visa regulations. Damman and Makkah.497 rooms by 2014. Currently. The company has nine hotels opened in the region already.500 new jobs. companies have been employing more Saudis who often require more training. Expansion through local franchise partnerships are planned in Jeddah. Mercure Al Khobar and Novotel Damman Business Park. • Saudi Arabia is of great interest to the company. as it is a market which helps Accor to diversify away from the United Arab Emirates. • In Saudi Arabia. to reach 54 hotels with 12. This means that there will be more demand for corporate outlets. whereby these are compelled to have a large proportion of Saudi employees. The domination of expatriate workers in the workplace became an issue and hence since 2006.

The UK. which are experiencing business growth. also due to the Olympic Games in 2012.Category and Geographic Opportunities Travel and Tourism: Accor Group © Euromonitor International UK and Latin America The UK shows promise • In the UK. and London in particular. The brand‟s major goal is to tap into all the capitals in this part of the world. São Luis. Ibis. London continues to be one of the most desirable cities for hotel development and is key for hotel operators looking to expand their networks internationally. are of great interest to the company. Ibis in Latin America • Accor‟s economy brand. 4 in Chile. By the end of 2011. eight new properties were opened in the region in particular Colombia (Bogota and Santiago). with 51 in Brazil. 21 . as well as major cities. Chile (Antofagasta) and Paraguay (Asunción). Accor introduced an aggressive expansion strategy to increase its network to 300 hotels by 2015. Santos. 57 Ibis hotels will be opened. By 2015. which is likely to strengthen the UK‟s hotels industry. Ibis is expected to have another 10 properties in Brazil (Curitiba. one hotel in Chile (Concepcion) and one property in Peru (Lima). In 2010. is boosting its expansion in new countries in Latin America. 1 in Colombia and 1 in Peru. Belo Horizonte and Recife).

the Green Key Eco-Rating Program (Green Key) will be rolled out to all Motel 6 and Studio 6 properties. Accor is renowned for its sustainable initiatives such as the Green Key Eco-Rating programme. • Initially launched as a pilot scheme in 20 locations in the US. Green Key programme certifies and inspect hotels and resorts based on their commitment to sustainable “green” practices. 22 . are likely to strengthen their competitive advantage in the short term. as well as greener lifestyle are expected to create opportunities for sustainable and eco-tourism. water and waste) at a lower level and enhance services through the offer of healthier environments and more comfort to tourists. these two brands will be certified. which are able to maintain operational costs (energy.Category and Geographic Opportunities Travel and Tourism: Accor Group © Euromonitor International New category focus Sustainable development and sustainable tourism • The rising demand for authentic experiences. Hotels. • Much attention is expected in sustainable tourism in the coming years. It is expected that by the end of 2011.

Travel and Tourism: Accor Group © Euromonitor International Strategic Evaluation Competitive Positioning Category and Geographic Opportunities Brand Strategy Operations Recommendations 23 .

com responding to demand from customers for products specific to the Novotel brand. adding 10 hotels to its UK network in Q1 2011. Impact 2009 Impact 2010 Sofitel Pullman Upscale brand. Sofitel will launch hotels in Vienna. portfolio by the end of 2011. Action By 2012. 60 hotels were in Europe. Asia Pacific and Latin America. Brand repositioned at the top of the mid-scale segment. MGallery Upscale hotel brand characterised with distinctive settings reflecting the individualism of 40 new properties will be added to the company‟s the particular destination.Brand Strategy Travel and Tourism: Accor Group © Euromonitor International Brand strategy at a glance (1) Brand Global Strategy Luxury brand with 116 hotels (as of 06/30/2010) which works with designers (Jean Nouvel. the brand launched novotelstore. targeting business and leisure travellers. mainly targeted at business travellers. Africa. In 2010. 24 Novotel Mercure . Mauritius and a second establishment in Amsterdam. Sybille de Margerie. Middle East. Mercure brand features contemporary style at low prices appealing to both leisure and business travellers. Jacques Grange) to achieve a high level of luxury. Jean-Paul Viguier. By the end of 2010. Mainly located in major international cities and tourist destinations. Franchise agreement with Focus Hotels.

the brand is establishments were opened in Western Europe. hotelF1 Low-cost hotel brand featuring modern interior design and a strong focus on sustainable development.500 hotels globally by 2015. Ibis Economy brand targeting both leisure and business travellers. 25 . Awarded "Best Economic Hotel Brand" in China. new openings are expected in Luxemburg. All Seasons Non-standardised brand located in city centres and major business areas for business travellers. Impact 2009 Impact 2010 Apartment hotels mainly located in Europe and targeted at business and leisure travellers. Its primary brand location is in France. 22 new Budget travel accommodation in large metropolitan areas. Austria and the Netherlands. 80 Aparthotels (opened and planned) in Europe by 2013. In 2011. which seek value for money.Brand Strategy Travel and Tourism: Accor Group © Euromonitor International Brand strategy at a glance (2) Brand Adagio City Aparthotel Global Strategy Action Launch of the first Adagio City Aparthotel in Abu Dhabi in late 2011 or early 2012. even among those with the highest income levels. with 261 hotels in the country. Outside Europe. Etap Hotel /Formule 1 In 2010. known as Formule 1. Expansion plans for the brand to reach 1. Strong pipeline projects for Asia Pacific and Latin America.

The brand opened 55 hotels in 2010. with 1. Studio 6 Low-cost extended stay brand mainly located in the US and Canada. The brand opened three hotels in 2010.090 locations mainly in the US and Canada.Brand Strategy Travel and Tourism: Accor Group © Euromonitor International Brand strategy at a glance (3) Brand Global Strategy Action Impact 2009 Impact 2010 Motel 6 Low-cost travel accommodation brand. 26 .

Suite Novotel targets business and leisure travellers with its all-suite concept. Morocco and Dubai – new Suite Novotels opened in Malaga. Germany. Suite Novotel With its upper-mid-priced positioning. Following its debut in Luxembourg and five other countries. Spain. Mainly located in major international cities and tourist destinations. in 2010.Brand Strategy Travel and Tourism: Accor Group © Euromonitor International The new Suite Novotel by Accor • Accor re-branded its Suitehotel brand as Suite Novotel on 1 July 2010. will be opened by early 2011. it targets business and leisure travellers by offering a home-like experience. The re-branding gives Novotel a suite version. The new • • • • brand aims to capitalise on the brand power of Novotel for international expansion. The new Accor brand offers suites of 30 sq m. Austria. where Suitehotels were already present – France. relaxation and multimedia. 27 . It is an upper-mid-priced brand targeted at business travellers or families on city holidays. It is expected that Paris-Issyles-Moulineaux. Novotel Brand repositioned at the top of the mid-priced segment. France. and innovative services in catering. With 26 hotels located mainly in Europe. and helps it boost its presence in the centre of major cities. Accor intends to grow the new Suite Novotel brand internationally and further enhance its competitive positioning in the “all suite” segment in Europe.

TENor15. called “Self Service Business Centres” that augment the existing wi-fi with a 24-hour dedicated area offering net surfing. the Village People and AC/DC. A 140-second video is to appear on YouTube. • To attract younger guests. Planned to be installed in all Ibis hotels by 2011. offering free nights and supplementary services like the Web Corner. a webcam. • The campaign‟s main protagonist is the rock band. introduced a brand new advertising campaign in July 2010 that moves away from the traditional sales focus on pricing and service. Instead. repositioning the economy brand for the young summer leisure market in Europe. it focuses on a “rock „n‟ roll” image. chat and sending Ibis e-cards. hotels revamped business strategies to compensate for the weak demand. It features the hotel‟s various services. Facebook and MySpace Europe-wide. • The Ibis brand from Accor. 28 .Brand Strategy Travel and Tourism: Accor Group © Euromonitor International Ibis targets young travellers • Amidst the slowdown in business travel seen during the economic downturn. for example. Skype. this resulted in the emergence of new hotel layouts and a more focused brand positioning. makes Ibis more appealing to young tourists. This strategic move. Ibis is also investing in high-tech services. which is influenced by Queen. using a “day in the life of a rock band on the road” theme. Web Corner is a form of budget business centre. e-mails. In some instances.

facilitating the client‟s choice depending on location and budget. such as Portuguese. • Besides promoting the breadth and diversity of its hotel brands around the world for an entire month. where players had to spot the differences between two nearly identical photos from a selection of Accor properties worldwide. Etap. English. The initiative is seen as a fun way to engage with customers using social media. Accor aimed to generate brand awareness in North America through an online game called “Around the World Photo Hunt”.co.com website in order to better answer clients' demands. Accor uses social media as a promotional tool • In June 2010. In 2010. The concept introduced in one of Accor‟s hotel brands.uk) in the UK where customers can upload clips of snorers or create "snorchestra"– snore sounds mixed with music. and challenge friends to try to beat their score. The grand prize is a 12-night European holiday for two adults to Paris. The application is available in several languages. with more than 25 million unique monthly visitors. but equally to raise the profile of the brand in an increasingly competitive environment. 29 . Accor has implemented online tools such as iPhone and iPad apps. which aims to increase the transparency about its hotels and urge customers to provide their feedback on a hotel‟s prices. Customer feedback is seen as a tool which can boost guest service and generate first-hand insight to the service provided. Accor introduced a new version of the iPhone application. TripAdvisor branded sites make up one of the most popular online travel communities. French. Engaging with the customer • The French Group has launched a microsite called Snorchestra (www. Accor has put strong emphasis on technological tools by improving the accorhotels. services and facilities.000 hotels. Spanish and Italian.snorchestra. Accor encouraged participants to share scores on Facebook and Twitter. Berlin and Barcelona.Brand Strategy Travel and Tourism: Accor Group © Euromonitor International Social media TripAdvisor and Accor • Accor has included the TripAdvisor link on the websites covering its 4. Rates are provided in real time. German. seeks to showcase that the hotel rooms provide a comfortable night‟s sleep by having thicker insulation. • In 2010. which delivers a better and more improved search function for booking its hotel rooms. • In order to adapt to technological innovation and to better respond to clients‟ online expectations.

Travel and Tourism: Accor Group © Euromonitor International Strategic Evaluation Competitive Positioning Category and Geographic Opportunities Brand Strategy Operations Recommendations 30 .

The decision creates two separately listed companies. • Sale of 48 hotels in France. 7 July 2010 • Partial divestment of Compagnie des Wagons-Lits trains • Launch of Ariane 2015 corporate project. the idea of a potential demerger offered great opportunities for individual growth. management performance and optimised allocation of financial resources. shareholders approved the Major Operational Changes at Accor in 2010 • • • • demerger of Accor‟s two core businesses – Hotels and Prepaid Services. for EUR343 million. 21 July 2010 • Creation of new hotel investment fund in India.Operations Travel and Tourism: Accor Group © Euromonitor International Hotel-focused business Demergers and divestments • In June 2010. Belgium and Germany for EUR367 million. As Accor prepares to turn into a major franchisor and hotel operator. it plans to sell 450 hotels or the equivalent of 25% of its properties in the next four years. 2 July 2010 • Stock market listing of Edenred following the demerger of the Services business. Source: Company reports 31 . Accor also sold its investment in Compagndes Wagons-Lits trains to Newrest in order to become a pure hospitality ie industry player. As the Hotels and Prepaid Services businesses developed distinct business models. It is expected to speed up future growth within hotels through a more focused direction. The French company aims also to sell a 49% stake in casino group Lucien Barriere to the financial holding company Fimalac. • Ongoing cost-reduction plan aiming to save EUR45 million in 2010.

with an objective of 35. Mercure Ibis. hotelF1. Accor sold 48 hotels in Europe in 2010. 10 in Belgium and 7 in Germany. franchise. 31 of these hotels were sold in France. joint venture Selective investment All Seasons. operating under the Etap.Operations Travel and Tourism: Accor Group © Euromonitor International New strategic approach • Accor has the strategic ambition to become the leading operator in franchised hotels in Europe and one of the top three in franchised hotels worldwide by 2015. This plan will target openings in the economic and very economic market segment (50%) and in Europe (30%). Novotel and Suite Novotel brands. representing EUR367 million. management 32 . management. franchise. franchise Variable leases. • Corporate sources reveal also that 85% of the company‟s new openings are done under renting contracts or franchises. Etap. • In order to do so. Its main competitive advantage is its offer of a wide variety of travel accommodation options to consumers. Accor Asset-light Model of Operation Sofitel Pullman Novotel.000-40. Accor has continued to implement its "asset light" strategies in 2010. • Accor is following a development plan. Motel 6 Source: Company website Variable leases. Aiming to reduce debt. Formule 1 Management Management.000 new rooms per year. Ibis.

Travel and Tourism: Accor Group © Euromonitor International Strategic Evaluation Competitive Positioning Category and Geographic Opportunities Brand Strategy Operations Recommendations 33 .

thus achieving greater operational efficiency. it is pivotal for the company to continue diversifying its brand positioning. New luxury destinations? • The demand for luxury worldwide has created a new niche for non-traditional luxury hotels such as Pullman which furthered its development in Latin America in 2009-2010.Recommendations Travel and Tourism: Accor Group © Euromonitor International More risk possible Risk of the mature markets • Given Accor‟s objective to become a leading European More high-tech applications • More hotels utilise high-tech applications to capitalise on franchise player. the growing number of travellers staying connected while travelling. 34 . • The fact that Latin America is repositioning itself as a luxury destination presents enormous opportunities for growth not only for Pullman but for Accor‟s other brands. Accor must increase investment in new distribution platforms such as mobile and social media. • Although 2010 saw a slow recovery in the hotels industry. can enhance brand exposure and build brand loyalty. but also continuing its brand revitalisation. • Accor must continue to innovate in order to attract a diverse client base. • Capitalising on the power of social media to get guests to learn more about different brands. the threat of a double-dip recession is a risk to the future performance of Accor and increases its vulnerability to an unstable economic environment.

Report Definitions Travel and Tourism: Accor Group © Euromonitor International Definitions Hotels • Hotel outlets that provide lodging include independent and chained operators as well as all company-owned. Extended stay hotels are included. not the rack rate advertised by the hotel. ADR is based on the actual rate offered to the consumer taking into account discounts. It is calculated by occupancy multiplied by the average daily room rate per company. ADR is part of the calculation along with % occupancy to generate revPAR (revenue per available room). Smith Travel Research’s definition of market price segments: • Luxury . RevPAR • This signifies revenue per available room.next 15% average room rates • Mid-Price . It may refer to either the use of rooms or of beds. Occupancy rates • This expresses the relationship between available capacity and the extent to which it is used. Average Daily Room Rate (ADR) • ADR refers to the average daily room rate that a hotel charges a consumer for staying in a hotel room per day. company-operated.lowest 20% average room rates 35 .e. Villas attached to hotel resorts are also included in the hotels category. for company-owned.middle 30% average room rates • Economy . The word “residence” is not used with this meaning in English-speaking countries. RevPAR is based on rooms available for use by domestic and international visitors.top 15% average room rates • Upscale . licensed and franchised outlets. Aparthotels are included. Spanish hostals and Italian pensione. managed and franchised outlets. Euromonitor International measures system-wide revPAR i. Occupancy rates are based on the number of nights of both domestic and international tourists. Hotels include French pensions. leased.next 20% average room rates • Budget . Residences or serviced apartments are the same as aparthotels with the rental of apartments offering the service of a hotel.

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