Accor’s Innovative Tech Strategy is the Key to Digital Transformation in Hospitality
By Jordan Hollander
Last updated October 28, 2022
9 min read
Hotel Tech Report recently sat down with Accor CTO Floor Bleeker for a behind the scenes look at how the hotel giant is out innovating the competition. Accor is arguably the most disruptive large hotel chain in the world having recently unveiled a first of its kind multi-PMS strategy and also launching its own SPAC to invest in a hotel related businesses including technology.
Back in March of 2019 Hotel Tech Report published a piece titled This is Why Hotel Brands Shouldn't Build Tech. In that article, we made the case that hotel brands needed to rethink archaic tech strategies to adapt in a world of microservices, open APIs, cloud computing and cyber insecurity. Back in the 90s, hotel companies built their own systems due to constraints of on-premise legacy systems but that playbook is no longer effective for modern hospitality brands.
Accor has over 5,200 hotels in over 110 countries operating under more than 40 different brands. So how does a company of that size and scale maintain a rapid pace of innovation? In this interview we cover how Accor leverages a unique organizational structure to drive innovation, its technology investments and everything in between. We’ll break down Accor’s approach to innovation to help guide other hotel chains, regional brands and even independents in how they should be thinking about hotel technology.
Innovation Starts with an Effective Organizational Structure
At the core of Accor’s innovation engine is a strong ecosystem of tech teams with clear responsibilities and incentives:
- Accor Tech: in charge of the technology for hotel properties, for Accor teams and for global IT (infrastructure, cyber & operations)
- Digital Factory: in charge of digital innovation for guests and hotels
- D-Edge: a partner offering leading-edge cloud-based e-commerce solutions that Accor invested in to take care of its CRS system (TARS)
Accor tech also has two representatives on the Accor Group Executive Committee.
Breaking Down Accor's Technology Org Structure
The ‘Tech for hotels’ team has 8 regional hubs and another one dedicated to the lifestyle brands working directly with hotel properties. Each hub is led by an SVP who is constantly interfacing with hotels and getting tech ideas from the properties. This owner-centric structure is designed to have properties bubble up requests to the SVPs mirroring the tight feedback loop and customer centricity of top Silicon Valley tech companies. This approach is quite different from how most other hotel groups operate that typically mandate software to owners who then have no choice but to accept the tools that are forced upon them (especially when they aren’t the tools that owners would have chosen on their own and when they are footing the bill).
The key takeaway here is that Accor has done a great job dividing up what functions should be centralized and which should be decentralized in order to facilitate rapid innovation while still maintaining brand standards at scale. Accor also provides a clear infrastructure to help owners and operators bring tech ideas to corporate teams where many other brands lack a key direct channel from local ownership and management groups into corporate tech decision making.
Here's how Accor structures it's team for innovation:
- Strategy & Performance: drives strategic tech initiatives and ensuring excellence in execution.
- Infrastructure and Operations: in charge of serving Accor with high quality, fast and reliable tech infrastructure & operations.
- Tech for Accor: Focuses on the IT end to end digital journey of Accor employees and includes productivity tools, collaboration tools, mobility and corporate systems.
- Enterprise Architecture: Focuses on the overall Accor tech & digital ecosystem and fostering tech innovations.
- Security: Responsible for seamless tech & digital security for Accor.
- Tech for hotels: leading the 9 Hub heads of IT, including the new “Lifestyle” hub.
How Accor Leverages Its Venture Arm to Drive Innovation
Humility is a key ingredient to drive innovation and large corporations in any industry know how difficult it can be to innovate from within. Bleeker told Hotel Tech Report, “we complain that vendors don't innovate enough. It’s unfair. Vendors are incredible with really good ideas and drive to make a difference. We also have to better work with our hoteliers to accelerate adoption”. This is why Accor setup a separate venture arm to keep a pulse on the latest trends and technologies. Accor has invested minority and majority stakes in hospitality tech firms like Treebo, D-Edge and Bizzon.
“The defining characteristic of corporate VC investments is the degree to which companies in the investment portfolio are linked to the investing company’s current operational capabilities—that is, its resources and processes. For example, a start-up with strong links to the investing company might make use of that company’s manufacturing plants, distribution channels, technology, or brand. It might adopt the investing company’s business practices to build, sell, or service its products,” writes Henry Chesbrough in the Harvard Business Review.
Each Accor investment is deeply tied to the company’s operational capabilities. For example, Bleeker is particularly interested in next gen hotel companies like Sonder, Life House, and Treebo. For the Accor CTO, these companies have “technology first” hotel management strategies that legacy hotel chains like Accor can learn from. For an investment like Treebo, Accor can help source new development opportunities to add value for the business and in exchange it can learn from an upstart who has bypassed the typical tech decision-making with a simplified hotel management application.
Bizzon is another great example of innovation. According to Bleeker, Accor likes how Bizzon has reimagined the old world of separate epos, inventory systems and customer apps and replaced them with one connected platform. Bizzon's SaaS platform seamlessly connects epos, digital order and pay, inventory and payments. Accor is now in the process of rolling out Bizzon across a large swath of its portfolio. Could Accor have built an integrated F&B POS or mobile ordering solution in house? Probably, but it’s unlikely to have succeeded like Bizzon has. Accor used its muscle to increase the probability of success (and valuation) of the startup and gained a valuable technology supply chain partner in the process. This technology is now a revenue driver for both the hotel properties and corporate office - everybody wins.
Breaking Down Accor’s Innovative Multi-PMS Strategy
Our curiosity around Accor’s tech strategy peaked when we saw two separate announcements from different PMS vendors about signing a deal with Accor. Both Mews and Oracle sent press releases to our editorial team announcing that they had signed an agreement with Accor. Accor has certified 8 PMS (both regional and local players) and will certify more - but Bleeker has made it clear that this is far from a “free for all” strategy. PMS vendors shouldn’t reach out to him with hopes of getting certified because it’s unlikely to happen without internal pressure or demand from new hotels coming into the system and only after a stringent certification process that ensures security, compliance and interoperability with Accor’s customer, data and distribution platforms.
As we dug into this with Bleeker, the strategy became even more compelling as he shared the history of Accor’s PMS strategy with us and how it evolved to the current state.
Back in the 90s, Accor built its own PMS called FOLS because there weren’t many great options serving all of its markets at the time. About half of Accor’s 5,200 hotels are still using that PMS today - these are the eco and midscale hotels where the solution is still a great fit. As Accor grew into premium and luxury segments, the FOLS system wasn’t as suitable to serve the property level demands of those hotels. Additionally, new hotel types came into the portfolio like Jo & Joe, an upscale hostel brand that sells multiple beds per room. FOLS wasn’t capable of this functionality as hostels have completely different requirements.
The largest driver behind Accor’s decision to open its PMS strategy was due to the pain points around converting a PMS when onboarding a brand conversion or acquisition. According to Bleeker, this is the single biggest pain point during a conversion and by allowing more certified PMS vendors, Accor can now scale its development more efficiently and remove that pain point for owners. Think of this like syncing your iPhone data in the cloud when you get a new phone - there’s no need to repopulate your apps and contacts or learn how to use a new operating system like Android
Accor has a clear requirements checklist for a PMS to become certified. The PMS must have the following characteristics:
- Microservices and cloud architecture: This gives Accor flexibility to build or buy components it wants to upgrade in the future. For example, if Accor wanted to centralize payment processing and rip out the PMS’ functionality - it needs that flexibility.
- Pass compliance and security tests: each system should provide PCI AOC and is penetration-tested and monitored by centralized Hotel Tech teams.
- Open APIs: Have open API based integrations to quickly add new applications at the regional or property level. If one of the 9 hubs wants to adopt a new mobile ordering solution in the Middle East region, hotels need the ability to quickly add that.
- Integrations: Each of the vendors have their own set of integrations or interfaces, but at least, they should move to the advanced 2-way integrations with Accor’s loyalty and distribution platforms through D-Edge, as well as integration with our data system and hotel CRM.
Bleeker's Recommendations for Hotel Tech Procurement
The requirements for a PMS to become Accor-certified shed light on Bleeker’s approach to technology procurement both in hospitality and beyond. At the foundation of any technology procurement is what Bleeker calls “data by design”.
Prior to exploring any technology solution, businesses should think about the data they want to extract and interact with from that system. From there, they can then vet solutions based on whether they have those data capabilities since data is such a critical competitive advantage in our digitally driven society. He also recommends starting with security and setting up clear requirements around what certifications and tests must be passed for any vendor to come into the consideration set. Microservices, open APIs and cloud architecture are checkboxes that provide flexibility to innovate in the future.
Lastly, Accor looks for systems with UX (user experience) in focus. UX is much more than about looking pretty. Whether it’s in our personal or professional lives, we don’t use stuff that’s difficult and ugly. If hotels adopt systems that are ugly and confusing, team members flat out won’t use them. One of the biggest challenges with software is user-adoption and bad UX is a recipe for disaster when it comes to software user engagement.
Cyber Security, Contactless Check-in, Data Extraction/BI Tools and QR Codes in Focus
With an IT infrastructure and organization setup for success, Bleeker is optimistic about the future of digital transformation in hospitality and he’s constantly exploring new tech tools and strategies. We asked Bleeker where he’s particularly interested right now when it comes to tech tools and he gave 3 key areas:
- Cyber security: He’s particularly interested in cyber security solutions and recommends that even small independent hotels make investments here as the risk of cyber attacks and malware continues to grow exponentially. Hotels should be investing in security monitoring and antivirus software across all devices on their networks but should also be investing in regular penetration testing and at least annual security assessments to ensure critical guest data, like payment information, isn’t at risk.
- Contactless solutions: Floor was surprised at the QR code menu and mobile ordering solutions craze. He pointed out that prior to the pandemic, almost no hotel had ever requested that capability and afterwards it’s pretty much expected in every single F&B establishment. He also called out the fact that contactless check-in and check-out have gone mainstream for hotels in the wake of the pandemic - he thinks both are here to stay.
- Data coordination: According to Bleeker the foundation of innovation for a large hotel lies in that chain’s ability to standardize its data regardless of which PMS or other technologies are being used. Every vendor should be outputting data in a format that can be used to get a holistic view of the business at both aggregated and granular levels. Bleeker calls out tools like Hapi, HotelIQ and InTouch Data solving this huge need for chains.
In terms of “the next big thing”, Bleeker believes that personalization is still a way off in hospitality. Specifically, he’s interested in connecting our digital and physical lives. One example that he specifically called out was the concept of using website data to curate on property and in destination experiences. For example, he thinks in the next 5 years a hotel should be able to track when a guest visits the spa page of their website then deliver a push, email or text notification with a unique offer for that guest at the moment of consideration.
Whether you operate a 10-room bed and breakfast or 1,000 property hotel chain all of these lessons can be applied to your business in different ways. Think strategically and proactively when adopting systems. Constantly be assessing the market. Learn the latest tools and tactics to drive efficiencies and structure your organization to facilitate constant iterative innovation.