Accor owners welcome independents
 
Accor owners welcome independents
09 JUNE 2015 8:34 AM
Franchisees are not overly concerned at AccorHotels’ push to boost direct spend and increase customer choice by opening up its distribution platform to independents.
GLOBAL REPORT—Franchisees of freshly rebranded AccorHotels are welcoming independents to Accor’s brand.com, according to sources.
 
The company last week announced it is opening up its distribution platform to independent hotels in a bid to offer more choice and balance across geographical markets so as to encourage customers to book direct, rather than via online travel agencies.
 
“(AccorHotels’ announcement) caught me by surprise, and we’re still in the evaluation process, but on the other hand, there is clear differentiation between Accor-branded and non-branded hotels. The name on the roof indicates a different type of setup,” said Bart P.M. Beerkens, VP, commercial, at Grand City Hotels GmbH. With 11 hotels across Europe—four Mercure and seven Ibis properties—is Germany’s largest AccorHotels’ franchisee.
 
Aaron Greenman, senior VP of acquisitions and development, Europe, for Interstate Hotels & Resorts, said he isn’t expecting much of an issue. The company has a Novotel and four Ibis properties in its portfolio.
 
“Owners are never particularly happy, and certainly to the extent that if we have properties in markets in which additional supply comes in, and in our competitive set, we’d need to look into it more, but beyond that, there is not much of an issue,” he said. “In terms of overall approach, I understand how (AccorHotels) is attempting to position themselves against other booking engines.” 
 
In a statement emailed to HNN, AccorHotels said it is not turning itself into an online travel agency.
 
“We offer an alternative distribution solution to independents, with more transparent conditions. We are aiming to become the most powerful hotel booking platform in terms of traffic, conversion rates and bookings,” the representative said, adding that the company also wanted to become a benchmark hotel distribution platform for Internet users, alongside distributor platforms.
 
“OTAs are not hoteliers; they purely distribute rooms,” according to the representative, adding that the expansion also will be open to small hotel groups.
 
Greenman said the success of AccorHotels’ plan would depend on how sensitively and smartly the company rolls it out.
 
“In the opposite scenario, if an OTA decided to start up a brand, it too would have some friction with its existing ownership base,” Greenman said.
 
The AccorHotels representative said the company will “offer an ample choice of high-quality options to customers but not ‘hyperchoice,’ which leads to frustration more often than satisfaction.”
 
One market where AccorHotels seeks more representation is the United States, where it has few hotels.
 
“The objective is to densify our offer in the U.S., which is a major outbound market for us. We will target hotels in very attractive American destinations for American, European and Asian tourists,” according to the company representative.
 
Potential issues?
While the franchisees contacted by HNN don’t appear to be too upset, sources said other owners might not take the same tone. 
 
Michael Jones, managing director of hospitality and IT consultancy Delta Squared and a former VP of global distribution for Hilton International (now Hilton Worldwide Holdings), said if he were a franchisee hearing this news, “I might be a little peeved.”
 
But he understands AccorHotels’ goal of adding representation to provide customers “genuine coverage” and to also add independent hotels who would not pay to AccorHotels as much as the “15% to 28% they’re currently paying to (OTAs).”
 
“It depends on the small print of the contracts (with those independents signing up). If I was a franchisee, my immediate reaction would be: ‘You’re not going to sign up the hotel next to me?’” Jones said.
 
Another issue to bear, sources said, was that while franchisees might moan, essentially the franchisor can dictate what they can and cannot do.
 
“The distribution environment is getting more interesting, and we realize we have a minor voice in the whole process. Yes, we can speak up if it is not in our interest, but I understand (AccorHotels’) thinking. OTAs like Booking.com; they will not give up easily their share, so (AccorHotels’ new plan) is worth a try,” Beerkens said.
 
Beerkens added in his estimation there were between 130 and 140 Accor franchisees in Germany, most having just one of the company’s branded hotels.
 
“(AccorHotels’) executives must align brand franchisee interests with their own, especially in busy markets. You must remember hotels compete on a geographical basis,” Jones said.
 

1 Comment

  • Max Starkov - HeBS Digital June 9, 2015 8:02 AM

    When becoming an aspiring actor in your middle age is almost never a good idea? This is one such case and this is what the most recent announcement by Accor Hotels looks like: Aspiring to become an OTA-type of a distribution platform. Easier said than done! An interesting development, no doubt about that. I see three completely different POVs here that are not necessarily aligned: 1. Independents Hotels: Another distribution platform? Comparatively low cost (Ex. 10%-12%)? Why not! Important questions: How would Accor Hotels integrate the independent hotels' availability and pricing into their CRS? Manual extranet is so 1990s! How would Accord Hotels enforce rate parity? With a manual extranet inventory/pricing upload there will be so many discrepancies! Travel consumers will be able almost always find a cheaper rate on Booking.com or on the property own website. What about the loyalty program? Some hotels on accorhotels.com will have it, others not? The OTAs have figured out how enforce rate parity and last-minute availability a long time ago. Now Accor needs to learn "how to be an OTA." 2. Accor Hotels' Franchisee Owners/Operators: Since the majority of hotels in Europe are independents (65%+), Accor franchisee owners/operators will be afraid that an avalanche of independents will "clutter the landscape" by joining this new "open borders" program, and will dilute the distribution punch of the current Accor Hotels distribution. Owners/operators who are never happy with brand contribution, will now have even bigger issues with Accor. There will be a pushback by smart owners/operators, no doubt about that. All of sudden, you have to deal with 5-6-10 direct independent properties in your destination, competing with your franchised property on accorhotels.com! All the other major hotel brands will have a field day in their business development efforts and will win a ton of would-be Accor prospects. 3. Travel Consumers: What about Accor's brand promise? How about the brand value proposition? How would Accor Hotels enforce its brand values on all of these independents to make sure they provide consistent service (and amenities) in par with what consumers expect from an Accor property? There will be consumer defections from Accor to other hotel brands who stand behind each and every property on their website and have the system in place to guarantee it. In summary: a naïve and rather desperate attempt by Accor to monetize the "world out there" and become de-facto a hybrid OTA, without having the know how, systems+processes and thought leadership in place to do so.

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.