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BACKGROUND The Accor Hotel case focuses around the impact of technology disruption in hotel industry and the plans of Accor Hotels' for digital transformation, aiming to put the customer back at the center of its strategy and operations so as to compete in the challenging market and attain a sustainable growth. Accor group intends to respond strategically to the powerful wave of digital disruptions in the hospitality ecosystem, mainly originating from the emergence of review websites, online travel agents (OTA) and active social media forums. Apart from this they are also facing challenges due to rise of new competitors such as Airbnb. Olivier Arnoux, Senior VP Customer Experience & Satisfaction at Accor Hotels, and his team, are in process of frame and formalize a strategic plan in order to address the new challenges facing major players in the hotel industry brought about by digital disruptions. He plans to integrate this with existing offline marketing activities by following a systematic step by step decision-making process from understanding the nature and impact of online content in the customer journey, to building a strategic plan to integrate online insights into Accor Hotels' core business objectives for enhancing the reputation of the firm. In addition to the formulation of the plans, Olivier also has an insight that the implementation of their plan would only be effective with the support of the Accor employees and he is thoughtful about the plan to incentive employees.

Question 1) How has the customer journey of a traveler staying in midscale Accor Hotel change since the mid-2000’s when digital disruption started? Please use the template. Feel free to add commentaries to your answers beyond the information on the template.

DIGITAL DISRUPTION IMPACT ON TRANSFORMATION OF CUSTOMER JOURNEY Ø Before the digital disruption customers were mainly sourcing out their hotel needs through travel agencies and operators. They could get information about hotels and do bookings. Now internet and social media became a new channel in which guests can discover new destinations and hotels. Ø Prior to the digital era, Accor hotel and competitors were getting advantage of their long history and reputation in the industry, which had been introduced and sold to customers through travel and tour operators. The internet significantly improves the information flow among customers, hotel operators, and hotel properties. Customers become less loyal to a hotel brand or a hotel company as they tend to select hotel that provides the best value. Ø Lengthy and relatively risky traditional booking process during before digital revolution replaced with online bookings. Although online travel agents (OTAs) increase distribution and reach for hotel properties, they charge very high commissions as much as 15% to 25%, squeezing profit margins from hotel properties and hotel operators. Ø Digital technologies provide opportunities for hotels to make customer experience more seamless, such as online check-in and cutting edge in-room technologies. Peer review sites, such as Trip-advisor, and social media allow guests to share their customer experience, increasing information flow between customers and hotel properties. These platforms provide hotels with data on customer satisfaction and allow hotels to respond to negative reviews to regain customer loyalty.

Question 2) How are Accor Hotel customers changing (Exhibit 13) and how has technology played a role in these changes? Digital technology has played a significant role in changing customer behaviour. With the advent of technology, power has now shifted to the customer. Trust in the company has been substituted by peer trust. Consumers give more importance to the reviews of other people which they find more

credible and authentic versus company’s public relation efforts and advertisements. Customers wide access to on-line information from customer ratings to price comparisons of similar hotels has greatly influenced customer travel planning and purchasing behavior. Customers are now more vocal and share their experiences on-line whether positive or negative that gives power to consumers influencing others. Customers are also now more demanding and have no qualms with expressing their disappointment with any product or services. They can easily compare products and switch from one product to another if expectation are not met. Consumers have also become more autonomous. Bookings and payments are easily done on-line without the need for travel operators. This is the experience that Accor had with their customers who would often visit on-line sites for customer review or would post their own reviews. Real time feedback from customers have now raised the bar for hotels to be more agile in responding to customer needs and wants.

Question 3) In crisis prevention and monitoring, when negative customer reviews emerge, what should hotels do? Why is it important in brand building for hotels to display both negative and positive reviews? When negative reviews emerge from customers, Hotels should take this as a constructive criticism, and strive for improvement. Although some comments may be harsh, it is important to showcase a calm and professional reaction. Handling it through acceptance and aspiring to serve better are some ways on taking on the situation. In this modern and digital age, it is important in brand building for hotels to display both positive and negative reviews. Through this, trust between strangers can be established by giving authentic reviews, which is much more appreciated by customers rather than any other advertisement or PR stint. Positive reviews should also be showcased to help companies to be acknowledged for their quality services, products and other attributes. On the other hand, negative reviews should still be showcased for transparency and recognition that there is still room for

improvement. Due to easy social media access, Customers are greatly influenced and appreciate realtime rawness and authenticity from fellow consumers.

Question 4) In the age of digital, why is it harder to build strong trustworthy brands? In the age of digital, the power of messaging the qualities of the brand has shifted from the brand owner to the customer. It used to be that information disseminated to the customer could be set and controlled by the owner, which is through advertising and promotions, marketing brochures, and in the case of ACCOR, it’s partners and agents. Customers would have limited ability to compare. However, the advent of the digital revolution has allowed customers more access, able to give and receive more information about a brand. It allows them to compare various attributes (price, features, etc.) across different brands, as well as personal experiences of customers with their products or services. And a major decision factor for a customer to choose a product or service is the experience, and the resulting testimonies or critiques of customers who actually used the brand. These are seen as organic, reliable and more trustworthy than the messaging put-out by the owner, and increases the opportunity . These opinions are aggregated at times which results in ratings for certain review sites. In order to create a strong brand in this new digital environment, you have to consistently provide good to great experiences to multiple customers with varying tastes, expectations and preferences. This is more challenging than the traditional push marketing strategy previously employed. The rise of the influencers though allows companies to target key people that can help create a louder message of the brand’s attributes, provided still their followers see the experience as authentic, unbiased opinion.