Interview: Accor’s Deputy CEO On Building The Hotel of The Future

To jump from an established background in telecommunications and technology to the hospitality industry does not seem like a natural career step. But for Vivek Badrinath, who became deputy CEO, marketing, digital, distribution & IT at French hotel giant Accor in January, the move made perfect sense.

“I felt that it’s one thing to be building the tools for digital, but it would also be interesting to see the impact of these technologies on the sectors that consume them,” he explains, as we meet in the lobby of the firm’s latest Dubai hotel, the Sofitel Downtown.

After a career spanning the French Ministry of Industry, telecom operator Orange, Thomson India and most recently serving as deputy CEO of Orange Business Services, the businessman has now settled into his position at the centre of Accor’s 225 million euro digital strategy.

That telecommunications, specifically mobile, is set to play a big part is no coincidence.

“Mobile is going to be the tool of choice of the traveller and there will be a very quick shift towards mobility. It’s 12 per cent today, we expect it to be 40 or 50 per cent by the end of our digital plan.”

LeAving trAdition

Accor’s digital plan coincides with a period of intense expansion of its Middle Eastern footprint.

The hotelier now has 100 hotels in operation or under development in the region across its brands, which include Sofitel, Novotel, Ibis and Pullman, with 34 hotels and 8,500 rooms in its pipeline across the high end, midscale and economy segments by the end of 2017.

The ambitious 225 million euro five- year digital investment, being led by Badrinath, aims to consolidate the hotel group’s position in the hospitality value chain globally, with 60 per cent to be invested in improving middle and back office-solutions and the remaining 40 per cent to expand market share and optimise distribution unit costs.

Consisting of eight programmes, the strategy has been crafted with three groups in mind – customers, employees and partners – with plans targeting each including the launch of a single mobile application for all of Accor’s s services before, during and after a guest’s hotel stay, online training programmes for staff and the use of business intelligence and analytics.

These programmes come in response to three big technology shifts, Badrinath explains with some enthusiasm – mobility, big data and user experience.

“Mobility has several impacts. First of all, it’s a great tool for customer convenience. But in many cases, it’s also a way for the customer to have a short-term commitment window. Of the people who search on mobile, 21 per cent of complete their transactions, which is huge, ” he says.

For big data, Accor’s aim is more personalised targeting of its 14 million guest database, utilising information like the time of year and type of holiday they go on to launch specific tailored promotions of some of the hotelier’s 3,600 properties, or improving their experience during a stay based on previous bookings.

“You’re recognised. We know that you prefer to have coffee brought to you in the morning and that you don’t need breakfast, and you do this in all the hotels that you stay,” he gives as an example.

For the user experience, the focus is on the ‘customer journey’, with a new programme called ‘Welcome’, which allows functions such as online check-ins and checkouts to remove “unnecessary administrative steps”.

The aim is to focus on each stage of a customer’s holiday plans from the idea, to the planning, to the booking, to preparing for the trip and the stay itself, the deputy CEO says.

“Hotels used to think and behave between check in and check out. Actually, life begins much before you even thought about staying with us, and it ends well after staying with us once you’ve given your opinion to your friends and the world at large, and you’ve started thinking about whether you’d like to come back.”

These shifts are being driven by several major innovations to the way customer’s book their holiday, with previous points of comparison, including room quality and amenities, hit by the advent of online travel agents like Booking.com, online review sites like TripAdvisor and now the emergence of the customer-to-customer paradigm through services like Airbnb.

“Airbnb is a different business model it looks different it behaves different. It’s a model where for the first time the hotel is outside the value chain,” says Badrinath.

Although suggesting legal complications to the customer-to- customer model (with the Attorney General in New York claiming 64 per cent of Airbnb listings in the city were illegal in April) mean it is not a direct disruption to the hospitality industry, Badrinath does see lessons to be learned from its approach.

“Customers expect more personalised attention. They love to see where they are going to stay in great detail and on this count Airbnb has done a very strong job, because the pictures are good. The work that’s been done on projection and detail and information has raised the bar even for us. We’re doing reshoots of our hotels also in part because of that, as that’s what customers have come to expect.”

It is also no coincidence that Accor is focussing on the thread linking online booking, review and customer- SF to-customer sites together, namely the ability to distribute information and bookings.

Badrinath believes this approach will help the company gain more control of its platform, and in turn be a more likely first port of call for a customer looking to book a hotel room.

“It [the digital strategy] gives us more tools, more control and our own platform. The ambition of this brand is for us to have a powerful mobile app that will stay on the customer’s smartphone screen,” he says.

Studying StartupS

Another key tenant supporting Badrinath’s digital plans is acquisitions, with French start-up Wipolo, a travel software company focussing on mobile and web itinerary management services, the first.

As we discuss the deal, the executive links backs to the ‘customer journey’, which Wipolo’s travel companion app, collecting together the user’s hotel, flight, car rental and other booking details in one place for easy access, plays into.

“The question was whether we could build it ourselves. We save time because it’s been built. It also gives us skills in mobility, because we’ve got a few people that are good at building apps who joined the team and will help us move faster on other projects,” he explains.

Overall about 10 per cent of the total 225 million euro fund has been allocated for ‘tactical’ acquisitions, which will mean deals largely on the small scale, although Badrinath does not rule out a larger acquisition if a “completely relevant” company comes up in the next four years.

“For that price, we buy skills, pieces of code, technology and acceleration on certain projects, rather than huge businesses. You don’t get that for this kind of money,” he says.

The company is also participating in various innovation incubators with the intention of developing it’s ability to work with startups. One such example is seeing Accor work with PriceMatch to develop a revenue management product to offer its hotel partners, Badrinath reveals.

“If you’re not able to work with such companies you’re going to miss the next wave of innovation,” he says.

When asked to look beyond the digital plan to his vision of the hotel of the future, Badrinath lists several important factors. Connectivity, he says, will be excellent and “priority one” for hotels, while the smartphone will be the “remote control” of activities and interaction with services before and during the stay.

“I can see the hotel becoming a hub from which you go out and also a hub of information that helps you when you’re travelling,” he says.

The deputy CEO also expects digital to increasingly play into hoteliers’ classic niche of providing familiarity while making sure that the guest does not feel like he is at home.

“Digital makes what is predictable more predictable because the information comes before you know what’s going to happen and what you’re going to find in the hotel. At the same time, it helps you plan for the unexpected because you get information in real time.”

However, with recent innovations in the hotel industry focussing on robot butlers delivering room service, and in the case of competitor Starwood, guests avoiding reception entirely using their smartphone as a room key, removing human interaction is not Accor’s goal.

“That’s not our holy grail, far from it. When we designed the programme we explicitly said lets do electronic check in, not to do away with the welcoming but to have more of it. So lets get the paperwork out,” he says.

“Do I get excited about the technology behind mobile check in? I’d be the last guy to tell you that is not interesting,” he says.

But the deputy CEO also argues that for now the keycard “doesn’t cost much” and also “doesn’t need to be recharged”.

“We’re not going to be spending that kind of money. It’s nice, certainly as technology evolves enabling mobile phones to open doors is good and we will do it, but do we think that’s what bringing digital to hospitality is about? No, it’s not the core focus of our plan.”