AccorHotels and Air France Building a Partnership?

In line with their new strategic plan, the hospitality giant AccorHotels stresses their interest in acquiring a minority stake in the French-Dutch airline company Air France-KLM. This move is reminiscent of prior commercial partnerships: Accor further shifts strategy as they consider a card-based offer along with a joint loyalty program.

Through this agreement, the hotel group could generate up to one billion euros in revenue. AccorHotels will also strengthen their loyalty program and the groups might share their customer data. This would contribute to building a base with over 7 million customers, in France only.

The hotel group would also rely on a credit card scheme (Visa or Mastercard) to introduce a new payment card, and expects this medium to draw in hundreds of millions of euro in revenue. Just like their rival Starwood which, based on a similar model, makes one billion dollars in revenue with margins which can reach 30%.

Eventually, the group also plans to build on partnerships with many other industry specialists, and help them secure customer loyalty. Accor could for instance open their loyalty program to Carrefour, BNP Paribas or Orange so their customers may end up spending the loyalty points they earned with any of the program’s partners.

Comments – Strategic fight for securing customer loyalty

This project by AccorHotels highlights their intent to improve their market positioning with special emphasis on Big Data: a key technological focus for this hotel group. Collected information will then be exploited to carry out actions likely to improve their profit margins, so far hampered by new entrants.

This partnership also matches AccorHotels’ ambition to grow and better face competition from large-scale online platforms, including Expedia, Booking and Google.

Holding even a minority stake in Air France would provide them access to extra interaction points while addressing the gap which sets them apart from rival companies. To the same end, they already invested €250 million in digital enhancements, leading their technological spending to grow two-fold.