Accor steps up digital push and changes name

Reuters
An illustration picture shows loyalty guest cards of Europe's largest hotel group Accor displayed on a desk in Paris August 28, 2013. REUTERS/Jacky Naegelen

PARIS (Reuters) - Accor said on Wednesday it would spend 22 million euros ($25 million) to enable independent hoteliers to offer their rooms on its booking website as it seeks ways to fight back against online travel agents such as Expedia and Booking.com. The world's fourth-largest hotel group, which is undergoing a reorganization initiated by Chief Executive Sebastien Bazin, is also changing its name to "AccorHotels", in line with its website, as part of the strategy. "The transformation of our distribution platform into an open market place is a major step for the group and reflects a new approach," Bazin said in a statement. Accor, which competes with InterContinental, Marriott and Starwood, said the investment comes on top of the 225 million euros it has announced it would spend to beef up its digital business between 2014 and 2018. Accor has 3,700 hotels worldwide ranging from the luxury Sofitel to the budget Ibis brands. Its goal is to triple its online offering to 10,000 hotels by 2018 via this new service to be launched in July. Europe's largest hotel group faces challenges ranging from rising competition from online travel agents (OTAs), who are hitting the margins of traditional hoteliers and earning commission fees that can reach 20 percent of the cost of a room, to the growing popularity of online home-sharing site Airbnb. Accor makes a third of it sales online, evenly split between bookings made via its own website and bookings made via OTAs. Accor last year bought French start-up Wipolo, a travel software company that offers mobile and web itinerary management services. In April, it bought FASTBOOKING, a digital services provider for the hotel industry, whose expertise Accor will use to offer online booking services to selected independent hoteliers. Accor will charge a commission that Vivek Badrinah, deputy CEO in charge of digital, told Reuters would be below that charged by rival OTAs. Bazin, a private equity specialist who took over in August 2013, has split Accor into two divisions, HotelServices and HotelInvest, to separate its hotel services business from its property activities to boost profitability. The restructuring has started to pay off, with Accor posting a record profit last year. (Reporting by Dominique Vidalon)