The Current And Future Prospect Of Accor Hotels Tourism Essay

This proposal is to put into action and find new instructions of business by using over the last three years economic and profitable performance to characterize the answers. The suggestion seeks different essentials of business performance, such as: marketing development; Crisis management; and Functional level strategy of Accor Hotels to categorize the results.

The outcome shows with the purpose of Accor Hotels are performing well in the past three year’s company performance. But still, there are a number of improvements are necessary in industry growth. Crisis Management needs to be compulsory that can helps the organisation to perform more effectively. Analysing the Past trends and issues that causes the crisis related to the organization and businesses are able to stop, manage, or moderate the belongings of crises in the future.

Accor have opportunity to develop the business by geographical extension around the world. Market development strategy focusing in particularly at Asian and pacific region that has future development like constructing Accor brands like Suite Hotel and Motel6. That gives strength and also helps to geographical extension of the company in order to attain the customer satisfaction and brand image.

Accor should have functional level strategy in human resource management that are rewarding and motivating the employees, customers and reselling by various methods like Gift vouchers, prepaid cards, rewards to enhance the relationships with the customers and employees.

Contents

Executive Summary: 2

1. Introduction: 4

2. Background of Accor hotels: 4

3. Future Strategy for Accor: 6

3.1 Crisis Management: 6

3.2 Market development: 8

By analyzing the (Table 3) Asian pacific region have a huge growth in Travel and Tourism between 2008- 2018. Where constructing and building of Suite hotel and Motel 6 of Accor brands in Asian and pacific region. Focusing on new customers with the same product and service but in different geographical areas is the Market development. However China and India are the emerging market building more suite hotel and motel 6 for the customers. So, Market development strategy for Accor hotels to develop the geographical extension around the globe. 10

3.3 Functional level Strategy: (Human Resource Management (HRM)) 10

4. Conclusion: 10

5. Reference 11

6. Appendix A 14

Introduction:

This report is about the Strategic of Accor Hotels past, current and future prospect. Section one evaluates the background of the Accor hotels in their past three years strategies between 2007-2009.Section two, it will be the future strategies that will consider the Internal and external Issues and trends on the hotel with SWOT analysis. Finally, it concludes and summaries the whole report.

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Background of Accor hotels:

Around the world Accor is one of the foremost hotel operator in the world (Accor, 2008a), European organizer in hotels and tourism and the global organizer in Services to business customers and communal organization, Accor works in nearly 100 nation with extra than 150,000 employees (Accor, 2008a). Past 40 years, it has offer consumers with knowledge get in its two center businesses, Hotels and Service (Accor, 2008a).

Hotels: Hotels has a geographically and structurally reasonable business portfolio. Hotel action contains further than 15 corresponding product from comfort to wealth that are recognized and respected around the world for their service value (Accor, 2008a). Accor offers various luxury hotels brands like see Appendix A. Many lodging companies have developed many brands to give out multiple market segments (Jing, Dev, and Rao 2002).

Service: It operates over 40 nations; Accor Services plans, expand and handle elevated value-added services for corporation (Accor, 2008a). Accor Services propose a entire choice of prepaid services in the region of worker and community benefits (Accor, 2008a).

Accor hotels past and current strategies were evaluated with annual reports of the company and message given by Chief Executive Officer (CEO) of Accor Hotels. In 2006, Accor hotels have increased the number of rooms and available nearly double in 2010. The expansion model of 40,000 rooms per year focuses on organization contracts and franchise Accor (2010a).Accor has preferred four drivers to distribute the 40,000 new rooms per year by Expanding in Western Europe in Eco and Budget, and by franchise it increase the market share in established markets, Strengthen the location in rising countries, Management networking to expand the upmarket and luxury Accor (2010a). Accor has changed its strategy to focus more on increasing the business through franchising and organization contracts and less on construction of new hotels (Walsh, 2003).

Figure 1 Expansions and investment of Accor hotels around the globe.

Source: Accor (2010a)

The word ‘strategy’ refers to the wide direction, or holistic point of view, taken by an organization to plan for and make safe its long period goals (Marginson, 1988). Accor introduced acquisition of Motivano software in functional level Strategy of Human resource management (HRM) in the technological developments, which enables online management of employee benefits (Accor 2008b). Rewards and motivation for the employees, Customers and reselling by various methods like Gift vouchers, prepaid cards, Rewards to enhance the relationships with the customers and employees (Accor, 2009a). Kotler (2003) says that it is significant to make an excellent link among customers; and the suppliers in order to develop the issue of consumer faithfulness. Accor have product development for their customer’s relationship towards the organisation by having a multi brand A| Club loyalty program across the worldwide (Accor 2008b). An expansion method Accor service makes stronger its faculty for technical modernism with the gaining of Prepay Technologies Ltd. The achievement of Prepay Technologies makes stronger for Accor Services management and expands its collection of stuff and services in the UK (Accor, 2007b).

Accor focus strategy on French Polynesia for leisure travelers. It presents visitors the possibility to treat individuals with the crucial in leisure and luxury at three of its limited resorts in French Polynesia. Accor hotels are focusing particularly on the Le Spa at Sofitel, Sofitel Bora Bora Beach Resort and Sofitel Motu Bora Bora, a private island in French Polynesia (PR Log, 2007). Divertiture Strategy says that Selling a division or part of an organization (David, 2009). During 2007 Accor sold out 30 hotel properties in the United Kingdom for €711 million (Accor, 2007a). Because due to economic crisis and loss (Accor, 2007b). In product development Accor service start on UUB Premium card in the United Kingdom and the Commuter Check card in the United States (Accor 2008b). That helps to hold the customers and employees within the organisation. Accor Hospitality is to promote all its brands, collectively. That has various ranges of Facilities and low prices. That initially target business travelers and leisure break customers (Marketing magazine, 2009). Accor Hotels had a Net Loss of €282 million due to the economic crisis and restructure costs totalling €514 million (Accor, 2010).

Future Strategy for Accor:

3.1 Crisis Management:

“A crisis is the perception of an unpredictable event that threatens important expectancies of stake holders and can seriously impact on organization’s performance and generate negative outcomes” Coombs (2007: 2-3). Meyers (1986) categorized disaster into main belongings on community perceptions, product failures, sudden changes in the marketplace and changes in top administration. Meyers as well argue that crises can be caused by troubles with financing, business relations, take-over’s, global events and changes in rules and policy. For example, following the 9/11 attacks, most of the political and media debate on terrorism has decided on avoidance policies (Kahn and Weiner, 2002). Economic impact of 9/11 is sensibly incalculable; though the global travel and tourism council has approximate reduce of the travel and tourism demand worldwide to be 10%. This compare to the jobs loss of 8.8 million people worldwide including airlines, hotels and tour operators, generate a 1.7% decline of whole GDP for the global wealth. They were two different viewpoints about concerning crisis management. One group of Researchers (e.g., Perrow 1984; Gephart 1984) argued that crises are repeated and not avoidable; whereas others (e.g., Mitroff, Pearson, and Harrigan 1996; Roberts 1990) contended that in attendance are conduct through which association can stop, run, or moderate the belongings of crises.

Accor, which function the Sofitel, Ibis and Novotel brands in the UK, said it will cut 10% of its staff at its French head offices as it seem to make a 15% decrease in maintain costs due to the crash of the “unprecedented worldwide crisis” (Sharkey,2009). But Parsons (1996) put forward three categories of crises: 1. Immediate crises: Everywhere small or negative caution survives hence organizations are not capable to examine the crisis or arrange a preparation ahead of the problem or disaster strikes. 2. Emerging crises: These crises are identified and possibly it can be blocked or restricted through business act. 3. Sustained crises: This possibly will carry on for weeks, months or still for longer duration. The Bali terror operations in 2002 probably lost Indonesia half a million Visitors and $4.0 billion in revenue. And also in Jakarta hotels bombed in 17 July 2009 (Telegraph, 2009).

Hotels in Indonesia have been bombed which leads to afraid tourists will go to some other nation now, and hotels will have to expend a buttload more money on security to try to calm those panicky travellers down (Telegraph, 2009). In Mumbai, terrorist attacks train situation, a hospital, a café and two hotels – locations used by foreigners as well as local businessmen and leaders (BBC News 2008). It results in Negative travel advisories on India around various countries. According to the Federation of Hotels and Restaurant Association of India Booking by overseas travellers mainly from U.S and Europe comes down by 40% to 60% (Singh, 2008). According to Kash and Darling (1998) crisis prevention and planning can be managed by the following tools, strategic forecasting, contingency planning, issues analysis, scenario analysis. This prevention and planning are helpful to manage the crisis that affects the organization. According to Mitroff crisis can be prevented, manage, or moderate the effects of crises in the organization will helpful for the future crisis to be prevented. Accor should provided security to their visitors is unavailable very seriously, Sofitel Brussels Europe is endowed with a video recorder observation system communicate by 60 cameras and magnetic keys guarantee secure access to the hotel floors (Accor, 2010c). The Crisis Management Strategy is useful for the organisation of Accor in the future to overcome the economic crisis and threats of the organisation.

3.2 Market development:

Suggestion with the intention creates a character designed for an intangible body, products tell to customers feeling (Kim and Kim 2004). According to David, 2009 focusing on new customers with the same product and service but in different geographical areas. Brand justice besides let a group to enlarge and increase the product in a range of marketplace (Maharajan, Rao, and Srivastava, 1994). A hotel brand initially creates an importance for visitors by serving to declare them of a identical stage of excellence (O’ Neil and xiamo 2006).

The table1 shows Accor hotel brands geographic presence in the world, that there is a huge opportunities for start business in emerging market like Asia and Pacific regions. Because they have

Table 1 Accor hotel brands geographic presence in the world

BRAND

EUROPE

MIDDLE EAST AFRICA

ASIA PACIFIC

NORTH AMERICA

LATIN AMERICA

TOTAL

Total

2,310

143

402

1,076

174

4,111

Sofitel

34

24

45

9

9

121

Pullman

25

5

15

_

1

46

Novotel

264

20

85

7

19

395

Mercure/MGallery

483

30

105

_

81

699

Suite hotel

24

2

_

_

_

26

all seasons

42

_

33

_

_

75

Ibis

691

31

80

_

59

861

Motel 6

_

_

_

1001

_

1,001

Unbranded hotels

22

7

15

0

1

45

Source: Adapted from Accor (2010a)

Construction of Suite hotel and Motel 6 in Asia Pacific region, that has largest volume of Travel & Tourism Demand in the future prospective and increase the market place and exceeding the geographical perspectives around the globe.

World Travel and Tourism Council (WTTC) says that, Table2. China has climbed two places by beating Japan and Germany and it occupied the second position. Travel & Tourism service is lead by China (WTTC, 2008).

Table3: Over the next one decade, the image will change to some extent as emerging tourism markets start to gather greater benefits from their investment in Travel & Tourism development. whereas the USA, China, Japan and Germany will keep their current top four slots in terms of total Travel & Tourism Demand (in absolute terms), India will be the world’s number one in terms of yearly growth in Travel & Tourism require between 2008 and 2018, averaging 9.4% per annum – ahead of China, Libya, Vietnam and Montenegro (WTTC, 2008).

Table 2 Countries expected to generate the largest volume of Travel & Tourism Demand (TTD) in 2008 TTD,

S.No Countries (US$ bn)

1

USA

1,747.5

2

China

592.0

3

Japan

514.3

4

Germany

505.7

5

France

418.8

6

UK

403.7

7

Spain

338.2

8

Italy

302.9

9

Canada

231.4

10

Mexico

157.6

Source: WTTC, 2008.

Table 3 Expected countries growth in Travel & Tourism Demand between 2008 and 2018:

S.No Countries 2008-18 (% annualised real growth)

1

India

9.4

2

China

8.9

3

Libya

8.1

4

Vietnam

8.1

5

Montenegro

7.4

6

Romania

7.1

7

Macau

7.1

8

Namibia

6.9

Source: WTTC, 2008.

By analyzing the (Table 3) Asian pacific region have a huge growth in Travel and Tourism between 2008- 2018. Where constructing and building of Suite hotel and Motel 6 of Accor brands in Asian and pacific region. Focusing on new customers with the same product and service but in different geographical areas is the Market development. However China and India are the emerging market building more suite hotel and motel 6 for the customers. So, Market development strategy for Accor hotels to develop the geographical extension around the globe.

3.3 Functional level Strategy: (Human Resource Management (HRM))

Hotels are the most important components in tourism business and Human resource issues exist dangerous to examine value, and revolve the answer to global competitive (Jones and Haven- Tang, 2005). The significance of trouble describing to skills deficiency for the hospitality sector is clearly shown by (Zhang and Wu, 2004:425). Zhang and Wu observed that in China the qualified candidate have to be promoted by the hotelier to handle the decision-making or administrative tasks. So by rewarding and motivating to the employees, customers and reselling by various methods like Gift vouchers, prepaid cards, rewards to enhance the relationships with the customers and employees.

Conclusion:

The evaluation of past three years annual report, environmental opportunities and threads is set up much helpful information about the conditions of Accor Hotels located in all over the world. However, it is essential for the organization to think again to put into practice the necessary strategic performance for the future business development. The Current trends and issues faced by the Tourism and Hospitality organisation in Crisis that’s hits both the economic and the Organization background. So Accor hotels should have the Crisis Management strategy to overcome the threats like terrorism and issues like recession that they have currently facing. And Accor have an opportunity to expand their geographic existence in the Asian pacific region by focusing on the new segmented customers. Accor are increasing the rooms per year for the customer to retain with their strong portfolio in nature. Accor have weakness in man power shortage that can be solved by the future Functional level strategy that is managed by Human Resource Management. Rewarding and motivating of staffs in the organisation.