HOS801 Strategic Management Issues of Tourism Organisation: Accor Assignment Answer
STRATEGIC MANAGEMENT IN TOURISM AND HOSPITALITY
The Accor is considered one of the leading hospitality service providers in Australia. The entity has been facing issues regarding the quality of services provided by its employees. There has been an issue of increasing rates of accommodations, which might have still affected the revenue margin of the entity. From the strategic planning, it was reported that Accor might be able to boost its revenue in the market by adding more product range for the customers using the product development strategy. In the strategic analysis, it has stated that the company has been making huge investments in its services, which has declined its focus on other business areas. Thus, it might be necessary for the entity to enhance the skill sets of its employees to redevelop the productivity and quality aspects.
Strategic planning is defined as the process of emerging methods of improving a plan, roadmap, or guideline for the hotel which is depended on the vision, mission, values and stated goals and objectives which identifies the individual strategies as well as tactics and strategies that will be focused to achieve the emerging goals. There is an importance of the strategic planning at all the levels such as it puts a major stake in the ground in relation to what the hotels are expecting to achieve and second. It provides a guide for employees to monitor the resources and activities towards the objectives and goals that have been defined and acquired by the company as a whole. The present study will be discussing the strategic management issues of the chosen tourism organisation Accor. The study will be supporting the solutions with different models such as Ansoff, Swot and pestle.
Accor is considered as the leading company in the hotel industry in Australia, possessing hotel in 5 of the hue cities in the country. As per the CEO of the hotel Accor Pacific, apart from the troughs and peaks, the company has done very well in the country and now focuses in dominating the local industry with about 120 properties under individual management as well as 20 per cent of TAHL. Australian market conditions are most effective since the 1970s (Accor Group, 2019c). The demand is all-efficient in all the initial markets, as well as the French hotel giant, is forecasting annual rate rises of 10 per cent for the next four coming years. Accor has been extending the market horizons by targeting the serviced apartments and targeting motels as well as serviced apartments as being a crucial part to move into the hotel franchise sector, which offer its season brand to the owners to different apartments, small resort and motels due to the high potential for huge growth in the Australian-New Zealand markets.
The issue arising in Accor
In Accor, it has been seen that the drop in revenue is due to the quality of the service provided by the staff of the company that has been deteriorated. In the year 2006, Accor's DHH has suffered from several changes, in order to increase the revenues along with making the systems as well as management of the hotel more effective. The main issue was due to the increase in the room rates charges that have an indirect effect on the demand of the market. As per the internal files of the hotelier complex, the average rates of the room has been raised up to 5% from the last years (Accor Group, 2019a).
There can be a major possibility that reduction in the demand is directly linked with the increase in the room rates that had been not calculated in the correct manner as well as the customers did not observe the actual amount of money in the quality service that they are provided. This may also be applicable in developing an idea for performing the hotelier complex. It is hardly efficient in focusing together in an effective way. Due to this problem, the customers are not satisfied with the hotel. Due to this reason, Accor is losing its customers and reducing productivity. In the first six months of 2006, the revenues have been dropped from one year to the other by an approximate average of 7.35%. It had the biggest decline was Accor with 10.60% as well as the smallest gap of the hotel with a 0.1% reduction in the rate of revenues, all this is identifying the lack or rate of occupancy (Accor Group, 2019a).
Figure 1: Accor facilities
(Source Accor Group, 2019a)
On the other side, there is evidence that corroborates the major assumptions about the effect of organisational changes on the consumers and their awareness of reducing the quality services served by the employees. The three efficient areas of complaint were conference, accommodation and catering as well as Accor hotel. The customers were not fully satisfied by the service that is provided by the sales executives were incorrect or that the stipulations were not being fulfilled. As though in other cases, the rooms were not linked properly to the focused customers.
As per the present situation, Accor is facing issues of employee's productivity, which is declining the quality of services of the hotel. This has made a direct impact on the demands for accommodations in the market (Camelia et al. 2019). In addition, the revenue of the entity has been reducing due to increasing rates of the hotel rooms, which are inappropriately set by the business entity. Accor might introduce a product development strategy by introducing new product and service range, for boosting its revenue in the market. It has been stated that the introduction of new product development might introduce training programs to increase the skills of the employees. This might help to solve the current issue faced by Accor in the marketplace.
The swot analysis includes internal environmental analysis of business entity to extract the limitations of its scope potentiality and barriers of growth. In the case of Accor, the company has a potential reputation and corporate culture in the marketplace. It provides superior services to its customer. The company covers a lot of territory of a chain of hotels, which helps the company to create strong financial stability. Strength of the company is its brand recall in middle scale, upper scale and budgeted lodging. According to the weaknesses, the Accor is stated as a non-strategic business, which applies less strategic applications for sustainable growth in the market. The fixed costs of the business are considerably higher compared to other competing hotels in the market (Tan, 2018). This increases its business expenses and out pressures on the revenue. The company is losing its business due to increasing online budgeted hotel services. The entity has been investing in its services hugely, which has developed cash flow misbalance. Due to a rise in the costs of hospitality, the demand for the accommodations of the hotel might decline in the near future. The Asian countries have a huge demand for budgeted and middle scale hotels, which might be scope of generating revenue for Accor Accor Group. (2019d). In addition, another opportunity that might be reliable for Accor is the engagement of merger and acquisition, which is trending strategy in the hotel and tourism industry. According to the threats, Accor covers many territories, which increases the risks of foreign exchange and currency rate fluctuations. These changes might affect the revenue generation of the entity. On the other hand, the rising budgeted hotels and lodging have declined the market share for Accor in the global and domestic marketplace.
In the case of Accor, the company operate s more than 140 countries, the political stability and legislative conditions of these countries is affecting the business of Accor. In the case of France, the political issues are still stable for Accor due to less threat of terrorism, although the terrorist acts on other countries have changed the demands for tourism and hospitality (Demirciftci & Kızılırmak, 2016).
The economic conditions of the global tourism industry have been raised to 5.7% per year, which has helped Accor to generate profit margins in the market. However, the changes in currency rates and foreign exchange, the pricing, costs and tariff rates have affected the revenue and cash flow management of the entity
The Pestle analysis provides an overview of the external environment of the business entity. Accor uses seven different languages to provide quality services to customers through online and offline sources (Karam, 2018). In tourism, the demand for solo travellers has been increased for exploring new places.
This might benefit the company in the near future. The advancement of technologies such as online hotel booking, online payment systems, social media advertising and advanced GPS tracking systems has increased service options for Accor to provide its customers.
The travel ban was imposed in some countries due to political tensions. This has affected the demand for hotels and accommodations in the market (Elbanna, 2016). There is terrorism insurance regulations has introduced, which might increase production cost and pricing of the hospitality services.
The changes in climatic conditions have been affecting the tourist's decision making to visit certain destinations. The natural calamities such as flood earthquake rates have increased concerns about the hospitality demand in the market.
Accor is one of the leading hospitality service providers in the Australian Hotel Industry. The company is facing issues regarding the fall of revenue due to poor service quality from employees and increasing rate o accommodations. As per the market analysis, there is the scope of development for the entity, if the product and services of the entity could be increased through a product development strategy.
In regards to increasing the quality of productivity, the skills and abilities of the staff members might be increased through job training and seminar sessions. In addition, the company might reduce its focus on investing in the services, rather boosting its brand through online sources. The company might engage the merger and acquisition of small budgeted hotels to stay competitive in the marketplace.