Hotel Chain Industry Analysis

This report analyzes the external business environment faced by the UK hospitality industry, focusing on the hotel chain AccorHotels. It discusses the challenges posed by emerging technologies and the competition from Airbnb. Recommendations are provided for AccorHotels to expand its network and improve technological growth.

Running head: HOTEL CHAIN INDUSTRY ANALYSIS
Assessment 2: Hotel Chain Industry Analysis
[AccorHotels]
Name of the student:
Name of the university:
Author note:

1HOTEL CHAIN INDUSTRY ANALYSIS
Executive summary
The main purpose of this report is to identify the external business environment being faced by
the UK hospitality industry. The paper serves the purpose by studying the different contents in
context to the chosen hotel chain “AccorHotels”. The study finds that despite being one of the
leading hotel chains in the world, AccorHotels, face strong competition from Airbnb. It has
failed so far to respond to emerging technologies, which has actually benefitted to Airbnb.

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Table of Contents
Introduction......................................................................................................................................3
A Business Planning Report............................................................................................................3
1. A PESTLE analysis.................................................................................................................3
2. A SWOT analysis of the hotel chain.......................................................................................4
A Market Research Report..............................................................................................................5
1. A Trend analysis......................................................................................................................5
2. An Evaluation of the ability of the hotel chain........................................................................8
Conclusion and Recommendation...................................................................................................8
Recommendation.........................................................................................................................8
References........................................................................................................................................9

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Introduction
Having placed in AccorHotels and successfully completing the first phase of the
placement, the learner is now into the next level of the placement, which is to be a part of the
strategic project team. The main purpose of this report is to gain insights into how to construct a
business planning report and a market research report. The purpose is being served by adding a
few contents to both of these parts. The contents are PESTLE and SWOT analysis in a business
planning report, and trend analysis and evaluation of the ability of the chosen hotel chain.
A Business Planning Report
1. A PESTLE analysis
Political: Brexit will affect the staffing levels in hotels. EU workers are in good percentage in
many UK hotels. With Brexit coming into the effect, there is expected a significant drop in
labour supply from other parts of EU to the United Kingdom (Ziv et al. 2018). Hence, this will
create additional pressure on human resource management to recruit more workers and
professionals from within the United Kingdom.
Economic: Post Brexit, the UK economy will be affected by the country's current political state.
Consequently, modest growth is only expected in 2018 and also in 2019 (Ziv et al. 2018). It also
means a reduction in business investment. Hence, there will be limited growth in job supplies.
Additionally, the labour supply will also decrease. This will affect the capability of hotel chains
such as AccorHotels in terms of offering a wide range of services, and quality customer service.
Social: The spending capability of people gets increased when there is a growth in the country’s
economy. However, the separation of the United Kingdom from Brexit may have a negative or
modest impact on the country’s economy. Accordingly, the social behaviours will also change
such as the thought patterns. As a result, there will be increased demands for reputed hotel
brands, high value for money, promotion offers for repeat visitors, and so on (Ziv et al. 2018).
Technological: New and emerging technologies will keep on impacting hospitality
organisations. CRM has already influenced the development of new sales’ strategy. Point-of-sale
(POS) also has an impact on the industry. Cloud-based technology has helped to provide a much
better work environment for employees. It has also enhanced the operations’ efficiency. Now,

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artificial intelligence (AI) is gaining popularity across the organisations in the UK hospitality
industry. The technology will help to automate certain tasks. This includes but not limited to like
Speak-to-Order. Voice platforms such as Siri can be used for ordering foods and other basic
services without having any human interference to it (Radojevic, Stanisic and Stanic 2015).
Environmental: The UK hospitality industry faces some environmental challenges like tourism
waste, air pollution, and others. There is a continuous rise in the waste level in Cornwall because
of travelers who generate a higher degree of general and food waste. Air pollution is also on a
rise due to the increasing use of air and road transport (Molina-Azorín et al. 2015). Organisations
operating in the hospitality industry need to implement plans and make spending to control and
reduce their greenhouse gas emission.
Legal: The minimum wage rate in the UK is little higher as compared to many other countries in
the world. Hence, there will be an increased burden on organisations in regards to their operating
cost. In such a scenario, the key to success will be to establish a very effective and transparent
relationship with suppliers. This will help to receive quality products at the most competitive
price (Ziv et al. 2018).
2. A SWOT analysis of the hotel chain
This section of the report covers a SWOT of AccorHotels (Accorhotels 2019):
Strengths: Human resource management is one of the strengths of AccorHotels. The level of
employee satisfaction in AccorHotels is high because professionals get adequate opportunity to
get trained in relevant skills and expertise. “AccorHotels” is in collaboration with a close to 100
universities or colleges to help professionals be equipped with relevant work skills. It is due to
this fresh employees have little or no hesitation of working in AccorHotels. Brand Image is
another strength of AccorHotels. The hotel chain consists of 25 brands that also include the
flagship brands like Ibis in the budget range, and Novitel, Sofitel in upscale range. Leadership in
sustainability practices does also help the Accor group to attract visitors.
Weaknesses: Geographically AccorHotels are largely present in Europe, and Asia-Pacific. Apart
from these two regions, the hotel chain has a very limited presence in other parts of the world.
This is why many customers do not find it easy to relate to the hotel chain as a brand.

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Opportunities: It can opt for diversification into the tourism sector such as by buying share
stocks in Air France KLM airline. Airbnb is a growing threat for the hotel chains. AccorHotels
can head for new brands to counter the challenges being posed by Airbnb.
Threats: Since the Accor group is the biggest hospitality group in Europe, anything affects it
more than to its competitors. Additionally, other hotel groups are more balanced than
AccorHotels. Brexit, social unrest, terrorist attacks, and an incrementing growth of populism are
some of the issues that may have an impact on the hotel chain. It also has threats from its
competitors like Hilton, Marriott, and Hyatt.
A Market Research Report
1. A Trend analysis
Many trends are quickly becoming a part of the hospitality industry. These trends are
impacting the worldwide hospitality industry. Some of these trends are (Monaco 2018):
Catering to millennials: The number of millennial travelers is increasing with passing years. It
is expected to represent a higher percentage by 2025 across the globe. It is, therefore, important
to keep a note of service preferences of millennials. For example, AccorHotels can automate a
few tasks to suit the changing thought pattern of millennials. Examples of such approach include
but are not limited to like personalised interactions, easy check-in, and gourmet dining
experiences.

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Figure 1: Increasing Number of Millennial Travelers
(Source: Ft.com, 2019)
Higher use of technology: Majority of travelers especially the millennials are tech savvy.
Hence, it is important that their lifestyle is fully explored at hotels. For example, AccorHotels
can use and implement a list of technological gadgets at conference centers. Travelers nowadays
want access to a number of technologies at different places in hotels.

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Figure 2: Technology Adoption by Millennials
(Source: Pew Research Center, 2019)
Incrementing participation from international visitors: International leisure travel is on rapid
growth. Dubai International Airport has become the busiest airport in the world. These are some
good opportunities, which AccorHotels can utilise to retain its competitive advantage.
Increased focus on health: People now have access to health-related facts from a variety of
resources such as popular daily news channels and newspapers, internet articles, online news,
magazines, and so on. Hence, they are also aware of places that are enriched with a variety of
health treatments. Consequently, these people are travelling to such places seeking the treatment
in a variety of treatment forms. The trend can be used as opportunities. For example,
AccorHotels can consider establishing built-up facilities such as pools, centers, and spas. This
will add diversification to its service range and will also help to attract more travelers.
Destination promotion: An incrementing use of social media has created a platform to explore
the world of opportunities. A range of hotel chains at the global level can use social media to
promote the hotel destination. For example, AccorHotels can use guests' images on Twitter to let
followers know about their experience of the hotel. This may help in increasing the number of
travelers to AccorHotels. Additionally, it can also use such materials in their advertising
campaigns.
2. An Evaluation of the ability of the hotel chain
AccorHotels could not live up to the expectation earlier in regards to technological
advancement. However, it is trying to strike back again with the introduction of online travel
agencies (OTAs). It is trying to stay ahead in the technological clash with a rapidly growing
Airbnb. To stay ahead, the company has started to embark on a 5-year digital transformation
plan. This will also include adding in new services, broadening the direct booking platform, and
expanding in luxury. AccorHotels is attempting to decrease its reliance on OTAs. Instead, it
wants to promote and own its own direct distribution channel. It is more intended at improving
its high-margin luxury business further where it is still unbeatable from Airbnb. However, the
transformation plan as such being adopted by AccorHotels may not sufficiently help in staying

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ahead to Airbnb. It needs real assistance in the form of hotel network expansion, and deployment
of latest and emerging technologies (Dimitrios et al. 2018).
Conclusion and Recommendation
To conclude, this can be said that the hospitality industry in the United Kingdom can be
vulnerable to the external business environment in the country. AccorHotels, which is the part of
the world’s largest hotel group, face the challenge from emerging technologies. These
technologies have already blessed others like Airbnb. AccorHotels have already left behind in
the race to technological advancement. To compete with the likes of Airbnb and retain its global
status, there is a need to expand its network of operation and further its technological growth.
Recommendation
As stated earlier, AccorHotels should focus on expanding its network of operation as it
has a very rare presence in many parts of the world. Additionally, there is a need to grab
opportunities prior to it is being utilised by the likes of Airbnb.

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References
Accorhotels 2019. Worldwide leader in hospitality - AccorHotels Group. [online]
Accorhotels.group. Available at: https://www.accorhotels.group/en [Accessed 5 Jan. 2019].
Dimitrios, B., Ioannis, R., Efstathios, V., Christos, A., Dimitrios, T. and Labros, S., 2018.
Successful and Efficient Knowledge Management in the Greek Hospitality Industry: Change the
Perspective!. Academic Journal of Interdisciplinary Studies, 7(1), pp.185-191.
Ft.com 2019. The millennial moment — in charts | Financial Times. [online] Ft.com. Available
at: https://www.ft.com/content/f81ac17a-68ae-11e8-b6eb-4acfcfb08c11 [Accessed 17 Jan.
2019].
Molina-Azorín, J.F., Tarí, J.J., Pereira-Moliner, J., López-Gamero, M.D. and Pertusa-Ortega,
E.M., 2015. The effects of quality and environmental management on competitive advantage: A
mixed methods study in the hotel industry. Tourism Management, 50, pp.41-54.
Monaco, S., 2018. Tourism and the new generations: emerging trends and social implications in
Italy. Journal of Tourism Futures, 4(1), pp.7-15.
Pew Research Center 2019. Millennials stand out for their technology use. [online] Pew
Research Center. Available at: http://www.pewresearch.org/fact-tank/2018/05/02/millennials-
stand-out-for-their-technology-use-but-older-generations-also-embrace-digital-life/ [Accessed 17
Jan. 2019].
Radojevic, T., Stanisic, N. and Stanic, N., 2015. Ensuring positive feedback: Factors that
influence customer satisfaction in the contemporary hospitality industry. Tourism
Management, 51, pp.13-21.
Ziv, G., Watson, E., Young, D., Howard, D.C., Larcom, S.T. and Tanentzap, A.J., 2018. The
potential impact of Brexit on the energy, water and food nexus in the UK: A fuzzy cognitive
mapping approach. Applied Energy, 210, pp.487-498.