Accor Hotels vs

Air BnB

Business Models for Digital Economy

Submitted by: Group 11

Akash Jyoti Payun (PGP/25/314)

Harshita Arvind Kanodia (PGP/25/330)

Khushbu Dawar (PGP/25/334)

Siddharth Yadav (PGP/25/361)

About the Case

AccorHotels went through a significant digital transformation after recognizing the threat
posed by digital disruptor Airbnb to its industry.
AccorHotels' key challenge was to turn an asset-heavy, rigid hierarchical organization into a
dynamic, agile corporation.
The group launched an aggressive acquisition strategy and altered its organizational structure,
value proposition, and overall business model to cater to changing industry landscape
Its portfolio comprised of 20 internationally renowned brands, from luxury hotels to economy
lodgings
As an industry disrupter, Airbnb possesses a highly scalable and low-maintenance business
model.
Airbnb serves a considerably diverse customer base and offers a lucrative value proposition to
a broad range of property owners across the globe and in different market segments.
Value Proposition | Strengths and Weaknesses
Airbnb
Airbnb provides online platforms for hosts to provide
lodging and tourism-related services to guests. The
company does not own any real estate listings or
host events; instead, it works as a broker, earning a
commission on each booking.
Affordability-cheap pricing as compared to any rival
hotels.
They provide value for money stay experience to
millennials with a touch of the countryside.
Travelers benefit from a truly local experience and
hosts benefit from extra income.
Accor
Accor Hotels is a French multinational hospitality
company that owns, manages and franchises hotels,
resorts and vacation properties worldwide.
The hotel promises to deliver unique service
experiences which will make their guests feel
welcome every time they visit an Accor property.
Accor Hotels is a conglomerate in the hospitality
sector associated with prestigious hotel brands such
as Novotel, Sofitel, Fairmont, Banyan Tree, and
Raffles.
They leveraged technology to provide customised
services to a range of customers.
Airbnb
Strengths
Pocket Friendly - Airbnb is cheaper than traditional
hotels
Ratings- The ratings provided by previous guests can be
viewed by others. This system is important for building
and maintaining trust in people.
Digital and Technological Scalability
Local exposure- Guests learn from local knowledge
shared by hosts and feel at home wherever they go.
These different sources of value wrap together into
Airbnb’s tagline: Belong Anywhere.
Accor
Strengths
Presence across segments: Accor Hotels has something to offer
to customers with any budget.
Global Presence: Accor Hotels has a huge chain of hotels, resorts,
and vacation properties. Their operation span across over a 100
countries
Loyalty Programs: Accor Hotels is known to have one of the best
loyalty programs in the business.
Unique digital hospitality: The hotel chain maintains a database
of over 60 million guests tracking their preferences and
incorporating them into their service
Reputable Brand: The Brand name of Accor is reputed due to its
history.
Adequate Resources: Accor had a strong network of resources.
Weaknesses
Airbnb faces developing regulations and legal issues as
the law catches up to its platform.
Simplicity of business model makes it easy for other
market entrants to copy.
Lack of quality control for hosts-Part of the draw for
Airbnb is that travelers can find accommodations nearly
anywhere, but with no standards for quality control, the
level of comfort or cleanliness can vary wildly.
Difficulty to build trust among customers with digital
business models
Weaknesses
Losing to online businesses: In the mid-tier and
economy segments, Accor Hotels is losing its business
to small hotels and online businesses like Airbnb or Oyo
Room
Lacked agility in the fast paced digital disruption
Focus on franchising: Banyan Tree, and Raffles, have
suffered because of lack of adequate attention.
Overemphasis on sub-brands: The sub-brands of
Accor like Ibis or Novotel or Mercuri are immensely
popular and this is creating a disconnect in the
customers’ mind regarding the main company
Cannibalization due to wide range of offerings
The Digital Matrix

Experimentation Collision at the Reinvention at Accor Hotels: It is one of Europe's leading hotel groups, which started in
at the Edge Core the Root
1967 and till 2007 it was present in 95 countries and employed 240,000
people and owned, operated or franchised 4100 hotels for a total of
570000 rooms. That is why it is an Industry Incumbent. At first, it
seemed like the targeted customer segment of both the business models
Digital Giant
were different, but giants in the hospitality industry like Accor were
threatened when digital players like Airbnb adapted their offering to
business travellers. So, Accor has to now find ways to strengthen and
speed up its transformation to match with the trend.

AccorHotels
Industry
Incumbent
Airbnb: Airbnb is a recent startup launched in 2008. It is a platform where
it facilitates transactions of accommodations between customers and
owners and is heavily driven by technology and digital business
experiments. They have managed to develop the hospitality business
Tech
Entrepreneur Airbnb practices into digital format.