Arif Patel, VP Sales, Marketing and Distribution, loyalty AccorHotels – India suggests that the hotel chain is striving to providing a top-notch online interface experience to drive repeat business. AccorHotels is focusing on improving the quality of direct channels and mobile applications, he noted. Excerpts from the interview:
There is a general perception that the hospitality market in India is witnessing an upswing. Much of it is being reflected in higher occupancy rates. Do you see it impacting room rates in the near future? Will we finally see an uptick in room rates?
The Indian hospitality sector is on a high note currently with occupancy levels hitting 65 percent across the country while recording a nine-year high in 2017. The increase in occupancy is due to the high influx of international tourist arrivals and the growing demand from domestic business and leisure travellers. The same is evident with a 28 percent YoY growth in March of domestic tourist arrivals along with the air passenger traffic growth at 24 percent for the January to March 2018 quarter compared to 18 percent in the preceding quarter (December).
The rising occupancy rates is a clear sign of the market turning around, giving hotel operators the headroom to expect higher room rates, and hence, positively impacting the Average Room Rate (ARR). With all growth drivers in place, we expect the trend to be mirrored in 2018 as well, especially in the leisure portfolio.
According to the hospitality consulting firm, Hotelivate, in the financial year 2017-18, ARR across 130,000 hotel rooms in the country stood at INR 5,841. Moreover, the steady rise in room tariffs eventually led to the increase in revenue per average room (RevPAR) that rose by seven percent YoY in February this year. The trend is also positively impacting the RevPar across business destinations of Delhi NCR, Mumbai, Hyderabad, and Pune on the back of strong demand from meetings, incentives, conferences and exhibitions (MICE) segment and increasing number of corporate travellers.
From a growth perspective, we launched seven hotels in 2017 and have already launched four hotels in 2018 – ibis Pune Hinjewadi, Novotel Goa Dona Sylvia Resort, Mercure Chennai Sriperumbudur and Novotel Kochi Infopark. With each hotel opening, AccorHotels is working towards building an expansive network of properties while straddling across multiple brands and segments in line with the country’s growth momentum.
AccorHotels is going to add Raffles and Banyan Tree to its Indian portfolio of hotels. How do you see this development impacting AccorHotels? Raffles is a major development in the luxury segment for the domestic market. Your comments.
At AccorHotels, we have a growing network of 48 hotels in India across nine global brands present in 22 cities. We will continue to increase our presence with significant growth momentum in 2018. India’s growth as the number three market globally for domestic air traffic and fourth in terms of combined international and domestic air travel represents the increasing demand for leisure (and business) stays. We are excited about the opportunities luxury, and upscale segments present and are looking forward to either introducing or increasing the presence of some of AccorHotels’ internationally acclaimed brands such as Raffles, Banyan Tree, Fairmont and Sofitel among others.
Give us an insight into Accor’s distribution strategy. We understand that the focus has been ramping up in-house platforms. How is it turning out right now? What percent of your total consumers are driven by your own channels?
Our distribution strategy stems from the overall digital transformation journey with an omnichannel approach. AccorHotels has developed an ambitious digital strategy with the investment of €225 million between 2014 and 2018. This five-year plan focuses on enhancing the digital experience of our customers, partners and employees.
Overall, the focus is to improve the quality of our direct channel and mobile applications along with bringing in flexibility and ease of use for our website. We are making sure that when travellers/customers book on AccorHotels.com, it is fast and efficient, and customers would want to come back.
Development of strong in-house platforms along with strong acquisitions has helped us stay ahead in the changing atmosphere. In 2017, we acquired business travel solutions and distribution company Gekko Group, vacation rental provider TravelKeys, upscale and luxury hotel booking platform VeryChic and channel management solution Availpro to stay in sync with the changing needs of customers and everyday disruptions. Moreover, our first digital concierge – John Paul, helps us in guaranteeing excellent service for both simple and unusual requests of our guests.
Rewarding our loyalty customers is another priority for us. That’s why we offer greater benefits with digital solutions to enhance booking experience for our valued members. Recognition and personalization would become critical success factors for loyalty programmes in the future as two-thirds of members want personalized experiences and unique rewards suiting their needs and desires. Hence, it is our collective endeavour to gain more knowledge of our guests to exceed their expectations and make them ‘feel welcome’ at our hotels.
What is the future of loyalty programs? At an age where disruptions have altered consumer behaviour, how relevant will loyalty programs be in customer retention? Please share your thoughts.
For travellers, ‘choice’ is the operative word, when booking their stay. Customers consider several factors including the destination, food, experiential opportunities, check-in and check-out options, along with customer and professional reviews of the property. Differentiating one’s hotel brand in such a crowded space is critical and difficult than ever. In this case, a hotel’s loyalty program can be an effective way to standout and make sure that the customer sticks to the hotel. Furthermore, loyalty programs also help drive frequent visits and higher spends.
With many Online Travel Agencies (OTAs) and new age disruptors, loyalty programs help build stickiness and reduce the cost of distribution as loyal guests are more likely to use a hotel’s direct booking channels and mobile application. Also, with their positive reviews and social mentions, customers help brands in positively impacting its online reputation and overall brand equity, leading to better conversions.
2017 was a significant year for us with international loyalty programs merging because of recent consolidation in the global hospitality industry. Currently, AccorHotels has over 39 million loyal members enjoying membership benefits at 3,400 hotels across 13 brands in over 90 countries. The growth is supplemented with the 50,000-partner worldwide network, powerful proprietary CRM software application, and management platform with embedded 360° personalization and profiling capabilities of the digital concierge – John Paul. Available 24/7, the platform helps to cater customers’ every request and in delivering comprehensive loyalty solutions.
Our rewards and benefits are exclusive and designed functionally to suit a diverse base of global members. They are categorized under three main offerings; reward benefits, partnership privileges and elite experiences. While our 48-hours exclusive pre-sale access gives our members a huge advantage when booking top-activity destinations, our online check-in and fast check-out options pose fewer constraints and provide a hassle-free arrival experience, making our guests ‘Feel Welcome’ at our properties. Lastly, redeeming a free night option upon reaching 2000 points is another easy way to cash in on one’s Le Club points, whereas a complimentary room- upgrade is an exclusive privilege extended to our gold and platinum members.
In India, we have witnessed strong growth in member enrolments, which are upwards of 20 percent YoY. The revenue contribution from loyalty base also grew by more than 10 percent over last year.