Accor SA SWOT & PESTLE

SWOT

SWOT Matrix for Accor

Detailed SWOT Analysis of Accor

The detailed SWOT analysis for Accor SA is presented below:

Strength

1. Diversified brand portfolio in luxury, midscale and economic segments: Accor SA caters to major three categories of segments: luxury, midscale and economic. It also provides a range of leisure activities like fitness gym, spas and other membership activities. It attends to both business as well as leisure visitors across its brands. It houses brands like Sofitel, Grand Mercure, Swissotel, Novotel, Ibis, Hotel F1 to name a few. These brands are spread across location in Europe, Asia Pacific, Middle East and Africa, South America and United states region (North America, Central America and the Caribbean). In 2019 Accor opened approximately 330 hotels with 45000 rooms and signed for around 500 hotels and 76000 rooms. This helps Accor to target across all the target segments in all economies. Accor was growing steadily and showed 1.7% increase in revenue per room in 2019 but in the Q1 of 2020 the company reported 59% loss in revenue per available room owing to the health crisis. The brand also provides a range of services to its internal stakeholders-its employees in order to make their life easier, enhancing their well-being in order to improve its performance.

2. Powerful distribution platform and global presence: The presence of Accor group on online platform on online platforms is equally important as its offline expansion. Through the online channel Accor will be able to reach out to a larger customer base. The online travel catalogue caters to all the 39 brands under Accor. These 39 brands provide service to all types of customers and have a diversified distribution channel. The digital partner chosen in such a way that it makes the company more visible and efficient in delivery. Recent acquisition by Accor to build new distribution channel via brands like Gekko, VeryChic, ResDiary, D-Edge are helping to drive the vision of improving customer experience via digital strategy. These acquisitions help Accor to lead innovation and also have multiple touch points with its guests. This helps the group to create more personalized relations and also value for its customers and partners. The Accor group earlier managed its reservations via TARS which has more than 400 million bookings and records 1.7 reservations per second. The group aims to further strengthen its loyalty and distribution through its asset light virtuous cycle. In 2019 Accor also entered in a partnership with Sabre to create its first unified central reservation and property management platform for the international hotel system.

Weakness

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Opportunity

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Threat

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POLITICAL

1. Geopolitical risk due to broad geographical business footprint: The large geographical market reach of Accor greatly exposes it to a number of political, health and macroeconomic hazards. The operations of group are primarily focused on Europe and the Asia-Pacific region, which account for 46% and 31% of the network, respectively. In view of this, in these regions, a geopolitical conflict, an outbreak or a sharp economic downturn may contribute to severe restrictions on the movement of people, which would have detrimental effects on hotel RevPAR and subsequently the bottom-line, but may also cause the closing of hotels or the abandonment of construction plans in the area or areas concerned. The Organization is also exposed in most of its hosting countries to the possibility of terrorist attacks. A number of large-scale attacks or parallel attacks may directly or indirectly affect the guests and workers of the Company, resulting in a substantial reduction in the number of visitors in the region or the affected areas.

ECONOMIC

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SOCIAL

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TECHNOLOGICAL

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LEGAL

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ENVIRONMENTAL

1. Reducing its environmental footprint through its carbon strategy: Accor has signed up to the Science Based Targets initiative to define a carbon trajectory compatible with the Paris Agreement objective of limiting global warming to 1.5°C, with a view to achieving carbon neutrality by 2050. In January 2020, Accor announced its commitment to removing all single-use plastic items featuring in the customer experience from its hotels by the end of 2022. On top of the elimination of all plastic straws, stirrers and cotton swabs already promised for the end of 2019, the new Accor Group commitment includes elimination of individual toiletries and cups made of plastic by the end of 2020. Accor will aim for improving its energy efficiency with a combination of programs concerning internal culture, procurement, and partnerships to reach the goal of its carbon strategy. It aims to reduce energy and water consumption per room. The deployment of the waste management program and tools continues in the hotels to recover 65% of waste from hotel operations. The group aims at using sustainable food and reducing food wastage across its network.