Le Quartier Percy is one of more than 2,000 independent hotels that travelers could book on AccorHotels.com, but the company announced today that it is ending that service by year’s end. AccorHotels
AccorHotels is ending its online booking platform service for independent hotels after two years. The results didn’t meet expectations, and most of Accorhotels customers on its platform tended to book its own properties rather than the independents, the company said.
Two years ago, Accorhotels invited select independent hotels to display their properties on Accorhotels.com to gives its customers more hotel choices, and to provide a new distribution platform for the independents.
“This initiative is no longer relevant in regards to the Group’s strategy and its new profile as per today,” an Accorhotels spokesperson said. “Results are below expectations and most of AccorHotels.com customers tend to favor AccorHotels branded hotels when looking for accommodations on our platform. AccorHotels has therefore decided to put an end to the marketplace and to focus on the integration of its newly acquired brands and digital services.”
AccorHotels CEO Sebastien Bazin had said the Marketplace initiative, was originally designed to take on the likes of online travel agencies such as the Priceline Group and Expedia by transforming AccorHotels’ own site and distribution channels into platforms where independent hotels could also advertise themselves — just as they might on Booking.com.
Independent hotels paid AccorHotels a small commission when their property was booked via AccorHotels’ channels. And in return, AccorHotels would attract additional customers for them, as well as for their own brands, too.
Early Signs of Trouble
Earlier this year, there were already signs of trouble with the AccorHotels Marketplace.
Speaking during a July earnings call to discuss the company’s first-half results, chief financial officer Jean-Jacques Morin said that although there were approximately 2,000 hotels “onboarded” with a similar figure signed-up and waiting for implementation, the offering was not generating enough traffic.
However, when the company began its Marketplace efforts in 2015, the goal was to have 10,000 hotels signed up by the end of 2018.
Accorhotels needed to increase the website traffic, he said.
Part of the problem, Morin said, was that last year the company had to spend a considerable amount of its marketing and focus digital efforts on looking after its own franchisees. It seemed more consumers were booking Accor’s own branded hotels versus the independents advertised alongside them.
Had AccorHotels decided to keep the program, it would have had to increase its marketing spending dramatically to compete on the same level as the major online travel agencies, all of whom spend billions each year with Google to drive traffic to their websites. Expedia increased its direct sales and marketing spend 25 percent in the second quarter of 2017 to an estimated $1.4 billion, for example.
Morin said that AccorHotels needed to decide how much effort it would put into publicizing the product “because today you’ve got the hotels but there are not enough people aware of it, and hence the traffic is not at the level we would like it to be.”
AccorHotels invested an estimated $25.59 million (22 million euros) in the marketplace. That was in addition to $261.96 million (225 million euros) the chain said it committed to digital investments between 2014 and 2018.
The Marketplace initiative, which enabled AccorHotels to open up its booking platform to independent hotels which were not affiliated with chain. grew out of the company’s 2015 acquisition of Fastbooking.
The highly acquisitive Accorhotels also made a number of recent investments into driving even more hotel bookings, both for its own properties and those independents whom it works with via Fastbooking. These investments included the April 3 acquisition of VeryChic, a website platform that specializes in flash sales for hotel rooms, and the April 5 purchase of digital specialist Availpro for an undisclosed amount.
As for AccorHotels’ future plans, it appears the company will focus on more acquisitions, especially in the luxury space, building on its 2016 acquisition of the Fairmont, Raffles, and Swissotel brands, its acquisition of luxury concierge service, John Paul, and its recent investment in the iconic Orient-Express brand.
Accorhotels also intends to continuing growing its own portfolio of 28 brands spread out over more than 4,000 hotels globally.