An inspiring example of AI applied to hotel e-commerce strategy
While others are speaking about how the world is changing, Accor is the change. The more I interact with them the more I am blown away by their ability to reinvent themselves and innovate. In a very short time, they have evolved from an asset-heavy mammoth into a digital phoenix. This AccorHotels case study will give you a glimpse of what they are up to and what you should think about if you want to make your hotel e-commerce strategy futureproof.
1 Why AI is such a big deal for Accor and why you should care
Why AI is such a big deal for Accor and why you should care
I was sitting at an AI Meetup hosted by 3 digital wonder women from the Accor team (Maud Bally, Fikria Chaouki and Myriam El Harraq). I must confess that they totally blew my mind.
AI is a driver of customer centricity:
The first important concept that Maud mentioned right from the start is humility. Accor is fully aware that customers hold all the power and they know it. It doesn’t matter how big you are. If customers decide to go elsewhere, you’ll be bankrupt in a week. So the dynamic needs to change. As a hospitality provider, you can no longer think that having availability is enough. You need to move from product to customer centricity => from displaying rooms to convincing customers to stay and be loyal to your brand.
AI is a driver of competitive advantage:
The internet is not a free marketplace. Visibility is extremely expensive. Especially when you have Booking, Expedia & Co. in front of you. You can’t beat them at their own game as they have more advertising dollars than you ever will. So you need to change the game and move the focus from visibility at all costs to more conversion and fidelity. Don’t stop investing in online traffic – just realize that on average, you spend 92X more on advertising than on conversion and that’s a huge opportunity for you.
AI is the key to mobile and IoT:
In 2018, 60% of traffic and 40% of internet sales happened through a mobile device. By 2020, 75% of American households will be equipped with a voice assistant. Maud expects that this will be a reality for Europe by 2025. People are moving away from the computer, so you need to adapt your e-commerce strategy to be native of these new channels. The keywords here are interaction and personalization.
How do you turn your static, generic information into engaging content available on demand? Another exciting feature of these new devices is that they transform the purchase act into a conversation that can go on and give you the opportunity to be relevant throughout the customer journey. Great experience fosters loyalty. Today a returning customer is 6 times cheaper to acquire than a new guest. In a few years, this figure will probably move up due to ever-increasing distribution costs.
How AccorHotels is leveraging AI today
Fikria and Myriam make the magic happen. They focus on developing conversational experiences and leveraging data which are the real worth of AccorHotels.
Phil Welcome is the Hotel chatbot program developed by AccorHotels. By sourcing innovative technologies, they’ve been able to synthesize a unique product that is able to serve the guest at different steps of his journey.
So far Phil is available on Facebook Messenger and the Accor app. On Facebook, Phil is more focussed on hotel discovery. The app offers personalized service to each guest. On average, 65% of conversations are frequently asked questions and a human does not really add value. So, Phil filters them and delivers an instant answer. The staff can focus on second level support where human intelligence truly makes a difference.
Quick note: I have no idea if the app strategy will work or not. I wouldn’t recommend it for any small player, but if you’re Accor and there is a 0% commission on sales from the app it is probably worth the shot.
Fikria was very clear: All data is valuable – small, big, huge. She turns this into gold through an AI-powered real time data management ecosystem. The goal is to leverage every bit of data available to make all customer interactions relevant and engaging. Accor is not shy about leveraging data. They are fully GDPR compliant but they are aware that if you want to convert more, you need to be relevant and listen to your guests one way or another.
Since the GAFA are investing so heavily in customer knowledge we have no choice but to dive into data too if we want to remain competitive, explained Maud.
So far this materializes into :
– Phil Welcome Chatbot that recognizes each guest through the Accor app.
– Accor data + TinyClues are powering the Accor emailing campaigns. While official feedback from Accor is not yet available, here is a quick interview of Robin Korman from GHA that reports a 95% increase in conversion since they started using this solution.
– Accor data + Travelsify are rethinking their whole segmentation from the customers’ perception. The big idea is to leverage data to determine what hotel from the group would be the best match for every specific customer. This is really relevant especially when you talk about mobile interfaces, chatbots, voice interfaces where you don’t have a lot of space to present so many options.
– Accor data + an unspecified omnichannel instant communication platform: Help hotel staff deliver fast, high quality service to guests. Here is an example of the kind of experience this technology helps you deliver.
– Accor data + Google devices: Deliver a frictionless experience in the room? Sell rooms from Google Home devices? Suspense.
How Accor is handling its transition to AI first
Accor is not just doing new stuff. Before they did anything, they assessed and changed their DNA through a series of bold choices that nobody understood at the time, and which just might pay off handsomely further down the road. On Maud’s Linkedin profile you can read Impose your luck, embrace your happiness and go toward your risk. By looking at you they’ll eventually understand. And that’s the summary of Accor strategy – they prefer facing the risk of being wrong rather than the certainty of becoming obsolete. They understood that ROI is not only the dividend you pay to your shareholders, but also the Risk Of Inaction.
For any strategy to take off, you need the teams that will make it happen. For such a massive turnaround to happen, they needed to make sure everybody was onboard or out. Also, enrich their talent pool and embrace a startup mentality.
– Destroy silos: The AI project could only happen because several teams with different agendas and legacies were able to work together.
– Acquire new talent: Accor didn’t hire talented people only to replace existing vacancies but also to face future challenges with data and AI specialists. As a result, you have a pool of young, highly talented people with the means to achieve something and limited attachment to legacy systems.
– Startup mentality: Accor experiments and makes mistakes.
“Experiment. Fail. Learn. Repeat.”
They understand that it is part of the learning process. Most hotels just test something out, expect short-term results before they really put effort into it. As if change had to come from the outside.
Some technologies transform your organization so you have to put skin in the game and be committed to your ideas until you get it right. Either you do it or you don’t, but then do not come back crying. AI wasn’t Accor’s first attempt in creating a competitive advantage. They started with marketplace that proved unable to beat OTAs. That’s when they figured out that they were not strong enough (learned humility) and needed a game changer – so they started investing in AI.
Sometimes you fail at the first attempt but what makes Accor different from almost anyone else is their capacity to understand that failure is part of a learning curve. That each mistake takes them higher up and creates a higher barrier to entry for any other competitor that would do the same. They know that they started early so time is on their side. How long will you wait?
If you want to know more about the AccorHotels case study or learn about AI-powered hotel chatbots and how they can help you boost your direct sales, please visit our website or feel welcome to contact Benjamin Devisme at firstname.lastname@example.org.