April 2017, San Francisco
Marriott, Accor and the ‘exploding’ market for experiences
With AccorHotels claiming to be within 12 months of becoming a world leader in private rentals and Marriott placing its bet on experiences, Sally White examines recent digital moves of two major chains
Yet another hotel group investment in the digital economy! This time it is Marriott, which has bought PlacePass, a mere fledgling but in that major focus area - tours and activity space. More often it is AccorHotels which has been rushing to exit hotel ownership and to expand its online presence, and indeed it has just announced a whole slew of deals.
A closer look at Massachusetts-based PlacePass shows that it opened its doors only last year. Describing itself as “in the business of fun”, its two co-founders both have hospitality and travel backgrounds. Ethan Hawkes is, most recently, ex-consultancy from group McKinsey’s global travel practice. Meanwhile, Emily Bernard led the international media sales team at Washington’s Foreign Policy magazine and developed and brought to market new products that included in their focus destination marketing and tourism. According to Crunchbase, PlacePass has received only one funding round to date.
The attraction to Marriott is that PlacePass’s metasearch already offers the choice of “100,000 plus authentic local experiences in 800 destinations worldwide”. By this summer, PlacePass it will also power experience and excursion recommendations on the Marriott website and mobile app.
No one is talking money, but Marriott will be a lead investor in a funding round for PlacePass. While Marriott has not invested in a techco recently, it was an early investor in Priceline, and was party to founding hotel supplies marketplace Avendra.
Analysts’ comment is that Marriott is obviously intending to at least keep up with the major OTAs’ move into the “experience marketplace”. Expedia’s expansion has also been matched by Airbnb Trips and Google and Facebook have indicated that they will add more travel planners and city guides to their platforms.
“This experience market is exploding. It is a hundreds-of-millions if not a billion dollar industry,” Marriott CCO Stephanie Linnartz told a press conference. “We are using it to bring more to our consumers.”
This experience market is exploding. It is a hundreds-of-millions if not a billion dollar industry
Stephanie Linnartz, CCO, Marriott
Back at Accor
AccorHotels’ latest stream of digital news started off with the announcement of “exclusive negotiations” to acquire Travel Keys, an Atlanta-based private vacation rental broker with over 5,000 villas worldwide. That deal is expected to close in the second quarter of 2017 and no acquisition price has been announced.
This was followed by purchase of the Very Chic deal platform for the private sale of luxury hotel rooms, apartments, cruises and packages. Established five years ago, it how has 3,000 hotel partners in around 40 countries.
Then came hotel e-booking software solutions provider Availpro, in a deal aimed at further strengthening Accor’s business working with independent hotels - it is building up a B2B services division aimed at the independents. Availpro will be consolidated with Fastbookings, one of Accor’s first digital acquisitions, bought two years ago. Availpro, which has been in business for 16 years, partners with over 300 companies worldwide.
Not acquisitions, but yet more digital services - AccorHotels has also announced in the last few days a partnership with UnionPay International in Shanghai, to make payment easier for Chinese visitors to France, and the launch of MoodMatch. The MoodMatch search engine, developed by Travelsify, offers a new way to find a hotel. So, by selecting ‘Inspire Me’ on the ‘Find your Hotel’ tab on the site’s homepage, English and French-speaking internet users can let themselves be guided to where the mood takes them, regardless of the destination.
But, also watch out for something from AccorHotels more akin to PlacePass. (It is has already added a French events company, Potel & Chabot to its non-traditional businesses. It also, like Spanish hotel group Barceló for one, offers flight booking).
AccorHotels chairman and CEO Sebastian Bazin says there are there are “zillions of services we’re going to get into, among them having hotels assist locals with simple tasks and solving everyday solutions like holding packages or keys or recommending the best services nearby”.
...there are zillions of services we’re going to get into
Sebastian Bazin, chairman and CEO, AccorHotels
To speed up AccorHotels' already break-neck-speed digital transformation, Bazin has just expanded his team with the appointment of a high-powered chief digital officer. Last week Maud Bailly came on board head of the Digital, Distribution, Sales, and Information Systems and a member of Accor’s Executive Committee.
Formerly head of the Economic pole in Matignon - the Prime Minister’s office - she has been in charge of fiscal, tax, industrial and numerical affairs. As part of this she involved in State reform as well as post-Brexit issues for the Paris financial market. Her digital experience includes teaching public management and regular training in managing digital transformation.
Diversifying for digital
Bazin has huge admiration for the digital economy and the capital-light and labour-light business models of the likes of Facebook, Airbnb and Uber. “Digital doesn’t scare us,” he says, with some understatement!
For the past few years, Bazin has been focused on how to exit as many hotels as possible, in order to free up capital for alternative accommodation and digital services. Speaking at press conference for the group’s latest financial results a few weeks ago, he said he hopes to make some announcements within the next few months.
…in private rentals we’re within 12 months (of becoming) the world leader
“We need to diversify out of hotels, not that we do not like hotels, we love hotels, but our customers and colleagues want something different, so this is why in private rentals we’re within 12 months (of becoming) the world leader,” he said.
Market rumours have it that much of AccorHotels' property portfolio, valued at around €7billion, has been shown to investing institutions, such as major insurance companies. The idea being floated is to establish an investment company into which to move perhaps as many 430 of the hotels it owns. Selling at least part of that company could bring in as much €4 billion.
That would give Accor a vast chest of money to invest, for example, in the sharing economy. More than 80 million people worldwide have stayed in someone’s home. No hotel group can match that!
Time is running out! Join us in San Francisco in less than two weeks to hear from Brooks Martin, Marriott’s Senior Director – Mobile and Digital Guest Experiences. Other brands speaking at the event in include Hilton Worldwide, ClubMed, GooglePlay and fast-moving Lola