Telcos can draw ten lessons around organisational structure, strategy and staying relevant with customers from AccorHotels’ rapid digital transformation. This is the second in our series of transformation case studies from outside the telecoms sector.

Introduction

Why are we doing non-telco case studies?

Digital transformation is a phenomenon that is affecting every sector. Many industries have been through a transformation process far more severe than we have seen in telecoms, while others began the process much earlier in time. We believe that there are valuable lessons telcos can learn from these sectors, so we have decided to find and examine the most interesting/useful case studies.

In this report, we look at French hotel chain AccorHotels, which has undertaken an ambition transformation from hotel owner and operator into a digital platform for independent hotels. While our previous case study, publisher Axel Springer, has completed its transformation, AccorHotels has achieved significant changes but remains some years away from reaching its longer-term ambitions. However, because hotel groups and telcos share many similarities, such as being in the service industry, owning physical infrastructure and having highly distributed assets, we can draw many useful lessons from AccorHotels’ experience.

Like in previous transformation case studies, the key takeaways from our analysis of AccorHotels’ strategy will be the lessons for telcos to help them make their own transformation process run more smoothly.

General outline of STL Partners’ case study transformation index

We intend to complete more case studies in the future from other industry verticals, with the goal of creating a ‘case study transformation index’, illustrating how selected companies have overcome the challenge of digital disruption. In these case studies we are examining five key areas of transformation, identifying which have been the most challenging, which have generated the most innovative solutions, and which can be considered successes or failures. These five areas are:

• Market
• Proposition
• Value Network
• Technology
• Finances

For each section, supporting evidence of good or bad practice will be graded as a positive (tick), a negative (cross) or a work in progress (dash). These ticks, crosses and dashes will then be evaluated to create a “traffic light” rating for each section, which will then be tallied to provide an overall transformation rating for each case study.

We anticipate that some of these five sections will overlap, and some will be more pertinent to certain case studies than others. But central to the case studies will be analysis of how the transformation process is relevant to the telco industry and the lessons that can be learned to help operators on the path to change.

Contents:

• Executive Summary
• AccorHotels’ transformation experience – a summary of key lessons
• The AccorHotels story in brief
• AccorHotels in STL Partners’ transformation index
• Introduction
• Why are we doing non-telco case studies?
• General outline of STL Partners’ case study transformation index
• Drawing the parallels between hotels and telecoms
• What does a hotel business look like?
• How the Internet changed the hotel industry
• Accor in context of leading global hotel chains
• A successful transformation, so far
• AccorHotels’ transformation strategy
• Part 1: Separating property and services into distinct business lines
• Part 2: From digital platform to marketplace
• Part 3: Cultural transformation
• Part 4: Invest in innovation
• Conclusion
• AccorHotels in STL Partners’ transformation index

Figures:

• Figure 1: OTAs cut into hotels’ share of the hospitality industry
• Figure 2: Comparison of leading global hotel chains
• Figure 3: AccorHotels revenues and profitability are ticking up
• Figure 4: Accor outperforms on growth of average revenue per room
• Figure 5: AccorHotels property investments
• Figure 6: Solid growth in profitability
• Figure 7: AccorHotels eight digital hospitality programmes
• Figure 8: Steady growth in loyalty programme subscribers
• Figure 9: Accor acquires software expertise and reach to challenge OTAs
• Figure 10: AccorHotels is gaining traction with digital services
• Figure 11: AccorHotels still has some digital distance to go
• Figure 12: AccorHotels digital services investment plan
• Figure 13: AccorHotels acquisitions fuel business innovation
• Figure 14: Digital M&A investment as a % of service revenue, 2012 – H1 2017
• Figure 15: AccorHotels scores ‘Green’ on STL Partners’ transformation index

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