Name change signals Accor's transition into 'augmented hospitality'

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Accor bolstered its presence in the lifestyle space with the launch of the Tribe brand.
Accor bolstered its presence in the lifestyle space with the launch of the Tribe brand.

Accor has been anything but quiet lately, undergoing a corporate rebranding, unveiling a revamped loyalty program and launching two lifestyle hotel concepts, all in the past two months. 

And while the Paris-based hospitality group has never been the type to shy away from change, industry insiders say that the sudden innovation spree could signal an identity shift for the fast-expanding company.

Andrew Cohan, managing director at the Miami office of global hospitality firm Horwath HTL, said he sees Accor's moves as part of a broader shift in the hospitality sector.

"The truth is, a lot of these hotel companies are trying to figure out what to do, as they've transitioned from being real estate companies to really becoming much broader in terms of lodging and hospitality," Cohan said. "Many consumer product companies use branding and brand extension to reach beyond the product category and appeal instead to the lifestyle within which the product best fits."

Accor had rebranded as AccorHotels in 2015. Its late-February decision to revert to the name Accor certainly appears to be an artifact of this trend, with CEO Sebastien Bazin telling investors on the company's 2018 year-end earnings call that the change was made because Accor is now an "augmented hospitality" company. 

"We're dropping 'hotels' because we've been doing so much more," Bazin said. "Of course, hotels will still be the core activities for Accor, but we've added so much in terms of ecosystem." 

In addition to offering homesharing accommodations via its takeover of Onefinestay, Accor has also added brands like the concierge service John Paul, the table reservation system ResDiary and the collaborative-workspace company Nextdoor to its portfolio in recent years.

Chekitan Dev, professor of marketing at Cornell University's School of Hotel Administration and the author of "Hospitality Branding," said, "With brands transitioning from being pure hotel brands to lodging brands to hospitality brands with a broader footprint, including restaurants and activities -- and some even transitioning to offering lifestyle products for sale -- I think it is smart of Accor to rebrand from AccorHotels back to Accor. Accor is simpler, shorter, more memorable and reclaims its roots as a word that stands for agreement among people."

Accor has applied a similarly holistic approach to its newly relaunched loyalty program, Accor Live Limitless, which replaces the company's Le Club AccorHotels platform. 

According to Accor, the overhauled program grants members access to perks across the hospitality, entertainment, dining and sports sectors. Moreover, Accor claims that Live Limitless is the industry's largest loyalty platform by brand count, with members able to earn and redeem points at more than 30 hotel brands. 

According to Milton Pedraza, CEO of consulting firm Luxury Institute, however, it could prove challenging for a program like Accor Live Limitless to live up to its promises on such a large scale. Accor's loyalty program currently has some 50 million members, up from about 25 million four years ago.

"The problem with programs like this is the disconnects," Pedraza said. "I may go to the hotel and get one experience, and if I go to the restaurant or to a partner restaurant or visit a workspace, I could get a totally different level of experience. That inconsistency is very often where the execution falls apart. The more of the consumer's time you try to carve up as an experience, the more chances you have to fail, unfortunately, and so you need to be really, really impeccable."

Just how successful Accor will be in executing its lifestyle-oriented loyalty program remains to be seen, but the company appears to be going all-in on lifestyle with its latest hotel launches. 

In early March, Accor debuted Tribe, a midscale lifestyle brand aiming to offer guests "a high-quality hotel experience at an affordable price." In addition to upscale design touches, the concept showcases millennial-friendly amenities such as a bicycle rental service and co-working areas. 

The company has collaborated with boutique hospitality player SBE to launch House of Originals, a collection of independent luxury lifestyle hotels. Inaugural properties in the portfolio include the Sanderson and St. Martins Lane in London, 10 Karakoy in Istanbul and the Shore Club in Miami Beach, all of which were previously part of SBE's Morgans Hotel Group. Accor acquired a 50% stake in SBE last year.

The two new brands join flags Mama Shelter, SO/, 25Hours, 21c Museum and Jo&Joe as well as SBE's Delano, SLS, Mondrian and Hyde brands in Accor's lifestyle stable. They also mark the latest entrants in a category that continues to grow ever more crowded and, in some ways, homogenized, according to Pedraza.

"With so many brands claiming to be 'lifestyle,' it's definitely at risk of becoming generic," he warned. "What happens when every brand tries to reach that pinnacle of delivering a lifestyle or delivering an 'experience?' It becomes commoditized. And so these new brands will still need to find a way to differentiate themselves with something else."

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