Business Report

Table of Contents:
Introduction………………………………………………………………………………………..page 3-4
Analysis of the Macro and Microenvironment of the Event
Macro Environment – PESTEL analysis…………………………………………………page 4-5
Political and Legal Factors
Economical Factor
Social Factor
Technological Factor
Environmental Factor

Microenvironmental – SWOT analysis……………………………………………………page 6-7-8
Strengths
Weaknesses
Opportunities
Threats
Competitive advantage…………………………………………………………………………page 9
Porter Five Forces
The Threat of New Entrants
Buyer power
Threat of Substitution
Supplier power
Competitive Rivalry

Analysis of Leadership and CSR……………………………………………………………page 10

Goals and Implementation…………………………………………………………………….page 11

Conclusion………………………………………………………………………………………….page 11

References…………………………………………………………………………………………page 12-13

Figure 1: Novotel brand logo.

Introduction

This report will reflect on the opportunities of Accor company, using the Novotel brand to set examples. Moreover, recommendations that could improve the current situation of the business organisation will be outlined. The observations discussed in the report below do have conditions that will be noted. The following paper aims to demonstrate how Novotel can be competitive on the market and describe the situation around the business company in general. The “Accor group” are far more than a worldwide leader. Novotel is one of the most beloved and most famous brands in the company. Novotel welcomes each visitor to get exceptional experience and comfort, evaluate the performance of the staff, offering various services and get positive emotions. Every one of the hotel’s parts of the Novotel brand has its own passion that provides a unique experience. Furthermore, Novotel practices digital technology, which is adding simplicity and value. Outlining as an example, Novotel London Excel attract both business and leisure customers very successfully. That is conceivable thanks to the most valued strength of the hotel – its location. The four-star Novotel is significantly situated only 100 meters away from the Excel Exhibition Center, that attracts all the businesses visiting the centre as the hotel is the closest one to the most significant event venue in London. Moreover, 02 Arena, Canary Wharf island business centre and London City Airport are all located 10 to 15 minutes travelling with public transport. The DLR station custom house is just a few steps away from the hotel as well. Soon it is expected that Crossrail trains will also run from that station adding extra value to the hotel visitors. Novotel Excel offers comfortable rooms with stunning views of the Royal Victoria Dock. Besides the fact that the hotel has an excellent location, it also has an enjoyable bar with a terrace overlooking the River of Thames. The infrastructure of the hotel allows it to hold conference meetings with up to 100 attendees as well as drinks reception accommodating up to 500 people. The hotel also has a private dining room that is a great option for smaller groups looking for some quiet and private area to hold their party at. Novotel Excel is hundred per cent non-smoking hotel, it offers to its guest secure indoor parking, exchange currency desk, and it is fully accessible for people with reduced mobility. It consists of 9 floors in total with 257 guest room and four hotel suites. On the top 9th floor it has located the Sauna, Hammam and Fitness centre available to use free of charge to all the guests staying in the hotel. Figure 2 below is presenting an overview of the Novotel brand portfolio.

Figure 2: Novotel hotels around the world.

PESTEL

Political factors:

Accor is one of the largest hospitality groups in Europe, based in the city of Every Cedex, France. Accor company is present in 140 countries. The company is influenced by the political and legislative conditions of the countries. Accor has not faced a threat due to a decrease in the level of terrorism. One of the reasons is because of good relations with the EEC country and others as well. Accor is doing business all over the world.

Economical Factor

Accor, which operates luxury brands as Raffles and Sofitel as well as budget brands such as Ibis, predicted another growth in earnings for 2019.
This would be achieved as Revenue per Available Room (RevPAR), an essential criterion of activity, would grow about 3%, with Asia-Pacific progressively growing in the second half of 2018.
of 2018. “The execution of our plan and our business momentum remain on track to achieve another record year in 2019,” CEO Sebastien Bazin said in a statement. (Group.accor.com, 2019)
Accor Group is a fast-growing company with close to 4,800 hotels in 100 countries. Currently, the business organization has been cutting costs and expanding in Asia and in the luxury end of the market.
It has also been investing in different sectors such as concierge services, to promote its increase and meet the increasing difficulties modelled by companies such as Airbnb and online travel agents.
First-half profits before interest, devaluation and amortisation (EBITDA) rise 5.1% on a like-for-like basis to 375 million euros (£341.2 million).
For the full-year 2019, Accor expects EBITDA to rise to between 820-850 million euros, from 712 million in 2018.
RevPAR) rose 2.9% on a like-for-like basis in the first half, driven by robust demand in Europe, South America and the Middle East.
In France alone, RevPAR grew 4.7%, boosted by the International Paris airshow and the Women Football World Cup.
RevPAR in Asia Pacific, which declined 0.6% in the first quarter, improved in the second quarter to 0.3% growth.
The improvement was expected to continue in the second half notably in Australia, but China was more difficult amid economic tensions with the United States, deputy CEO Jean-Jacques Morin told a conference call. (Vidalon D., 2019)

Accor is currently discussing with several investors intending to sell the real property assets of its Polish unit Orbis. Those services have a gross asset value of 1.1 billion euros, Morin restated.
Accor shares have gained 9% so far this year, underperforming a 17% rise in the CAC-40 Index of French blue chips. (Vidalon D., 2019)

Social Factors
The current situation indicates that Accor provides excellent service for their customers. The company is using 7 languages through the online and graphics and maps also adding value to booking experience, which is due to the female worker because the company believes that women and mens at the heart of its strategy. The company focus on their employer and to make increased efforts more and more training place and of social advancement. Accor also provides franchisees with added value and HR services and helping earth people they are involved in the Earth Guest programme ECO and EGO and also developed corporate sponsorship for child aid, local aid, health and culture. Accor will continue to respect cultural generation and professional differences.

Technological Factors

Technology is the major macro-environmental factor which has influenced the benefits of both customer and company. Satisfaction of customers rises because the world moves so fast, goods are readily available, and services are more personalized, so that Accor utilise the following technology like hotel bookings and websites, up to date information systems, electronic media card (prepaid card) becoming more demandable.

SWOT

Figure 3: Swot analysis.

Strengths

After analyzing the competitors around Novotel Excel, it is safe to be concluded that the hotel organization is the best for holding events and business meetings: one of Novotel’s strengths is precisely the ability to provide its customers with professional planning of a wide range of events:
Opportunity for organising weddings, dinners up to 100 people, drinking reception up to 500 people, private dining place for 30 persons and Terrace access for 200 people. In Novotel, it has on-site private parking, electric vehicle charging station, accessible parking.
Flexibility and good relationship with “Excel Exhibition Center” and other hotels, combined and the proper use of all these features, the Novotel has an additional income that allows them to be leaders in their area.

Weaknesses
Inadequately equipped meeting rooms and equipment, for example, projectors without the ability to connect via the Wifi/Internet. Not enough space for coffee breaks and lunches for guests. There is also no direct access to the terrace, which leads to the loss of potential customers because they cannot find the entrance.

Opportunities
The opening of the new “Elizabeth line” station will increase the flow of delegates to Excel and also make it easier for residents and tourists to get to the city centre
quickly. It is a future benefit for the company. City airport is the most convenient airport which developing and expanding their space, due to these changes, it will bring more destinations and more tourists for Novotel.
Threats

Brexit

UK local hotels run by Accor suffered from Brexit uncertainties in the first half of the year.
The French hotel giant reported “moderate” revenue per available room [revpar] growth of 1.2% in the UK with London and regional cities posting “highly contrasted” performances.
The increase in RevPAR in London of 4.3% “reflects a persistently active domestic tourism market” while a RevPAR fall of 2.1% at regional properties “was impacted by uncertainties related to Brexit”.
However, Accor reported being on course for a record year after overall first-half earnings rose by almost a third.
The company reported earnings [ebitda] up by 5.2% to €375 million in the six months to June 30 with a full-year profits target of €820-€850 million.
Accor added 149 hotels during the period, representing 18,500 rooms, to give a total of 4,892 properties.
It has a pipeline of 1,153 hotels – 202,000 rooms – with 78% set for emerging markets.
Revenue for the six months was up by 4.8% one a like-for-like basis to 1.9 billion.
Chairman and CEO Sebastien Bazin said: “Once again, Accor reported another semester of reliable results, in line with its objectives set for the medium term.
As one of the leaders in the hotel market
for the benefit of the group’s millions of customers and partner-owners.
“The execution of our plan and our business momentum remain on track to achieve another record year in 2019.” (Group.accor.com, 2019)

How can Brexit affect the hotel sector? If the UK leaves the European Union, much will depend on the visa regime with other countries. Still, at the moment, due to the fall of the pound, it has become more difficult for many residents of the United Kingdom to travel and go on vacation to other countries. However, for Novotel and the hotel business as a combination, a specific situation is developing; it is becoming more accessible and affordable for tourists from other countries to visit London because of the price-quality ratio and different monetary currency.
However, there is a negative side because of Brexit, many people who do not have the citizenship of England will decide to leave the country, which will lead to the problem of finding staff and finding workers with specific knowledge.

Airbnb / central London reducing prices

One of the main threats to the hotel business is Airbnb.
Hotels, and in particular, Novotel London Excel, earn the most during conferences in the Excel exhibition centre or concerts in the 02 concert venue by raising the price of rooms.
A report by Morgan Stanley found that 42% of Airbnb users have replaced a traditional hotel stay with a property from this platform.
Airbnb was founded in 2008 and has proliferated. Novotel can deal with them by lowering prices, improving service, and rely on business customers who will not exchange comfort and quick service for renting an apartment through a platform where you will need to make food and drinks by yourself. For business people, time is money. Therefore, hotels have a chance not to miss these type of customers.
Novotel comply with the latest regulations in terms of fire safety, health and safety, Airbnb does not have those.
Another threat to Novotel is that in the centre of London, there is a decrease in prices for hotel rooms, which allows tourists to stay in the city centre. Because of this, the Novotel team needs to monitor changes and respond quickly.

Terrorism threat.
Current national threat level
The threat to the United Kingdom from terrorism is SUBSTANTIAL.

Competitors around

Novotel is very close to Excel and has a perfect location for attending events. Each year, about 25 million people visit Excel, and more than 4,000 events of shows and exhibitions are organized. For example, Grand Designs Live and World Travel Market. That why for the last couple of years around the Exhibition centre opened too many new hotels, for example, Moxy, Good Hotel, Sunborn Yacht and etc. Because of this, during a quiet period, it is challenging to fill the hotel due to the competitive prices in the area of the Excel centre.

Competitive advantage
Porter Five Forces

Companies should focus on porter’s five forces closely during the strategic planning process and continuous monitoring throughout implementation. These five forces are-industry competitors, new entrants, buyers, substitutes and suppliers (Pearce & Robinson, 2004). Buyer’s power to use substitutions of porter’s forces that work together for Accor. Buyer’s increase in power when the products have little differentiation does not save the money, and when buyers have an incentive to reduce purchasing costs (Pearce & Robinson, 2004). During the recession, buyers of temporary have been more price-sensitive and low switching costs and seek to substitutes.

Porter’s five forces analysis on Accor/Novotel.

1. New Entrants Barrier’s Low.
Hotel operating license
Capital requirement
Building a resource requirement
Human resource requirement

2. Rivalry-high
Many competitors around
Exit barrier

3. Power of Suppliers-Low
Many suppliers
Switching cost
Advance technology

4. Substitutes-Low
Readily available and attractive priced
Not comparable
Switching cost
5. Threat of Substitution
AirBnb

Leadership and CSR in relation to the Novotel London Excel.

Novotel London Excel is collaborating with “Mencap” organization: The voice of Disability. One of company objective is to help people with a learning disability to have real jobs in the open labour market, and for more employers to know that people with a learning disability make good workers when appropriately supported. Novotel is a part of this fantastic project. Since 2018, two people have worked at the Novotel hotel in the food and beverage department, and more people after great experience Novotel and cooperation with this organization is expected to continue. Novotel also fundraises money for different charities like the Teenage Cancer Trust. Staff participated in the event “Walk the distance and make a difference to young people with cancer”, Novotel also organize X-mas dinner for kids. Novotel is unique with the recruitment process as they look candidates from different pools such us “Springboard” that provides candidates who are “out of the market” because of age or socially excluded. Novotel and Springboard believe that each of us is individual and unique so are our learning needs. The ideal learning experience should be designed to fit our life’s pace, with support from advisors and mentors who understand us. We believe that education should prepare us for the real world and that working on meaningful projects under the guidance of industry experts is one of the best ways to get there. (Industry.springboard.uk.net, 2019)
Novotel also collects underwear to help a charity called “Smalls” for all who provide underwear to poor people in Africa. “To ensure the underwear we collect is distributed to those who need it most, we work in partnership with “Smalls”. “ (Smalls for All, 2019)
They help us to give all the brand new pants and bras we collect directly to the women and children who need our support, donating them for free. (Smalls for All, 2019)
Novotel recycling the hotel’s toiletries to help “Clean your conscience” organization, who is making soap bars and detergents to eradicate hygiene problems in Africa as people die for lack of hygiene. By recycling used soap and toiletries, Novotel can significantly reduce the amount of waste sent to landfill (and the associated costs) and at the same time engage both staff and guests. People who are helping to recycle are with learning and physical disabilities who are having work paid in the charity organization. The hotel collaborates with “Too Good To Go”, there’s food lost or wasted along the chain from farm to table. It is not only the food itself that goes to waste; it is all the resources that went into manufacture it, from water to land and labour. Consuming food harms the environment – it is responsible for 8% of the global greenhouse gas discharges, which we all know is bad news for the planet! The concept is that the client can order food through a particular application after completing the leftover food from breakfast is used for sales at low prices. Well-being program: Novotel Is providing a gym, sauna and hammam for the guests. Benefits of corporate social responsibility are cost savings, finding unique staff and keeping them in the company, identify new business opportunities, and of course the most important is business reputation.

Goals and Implementation

Every marketing plan requirement includes a control element that meets real performance with the intended performance. Through gathering performance data, the gaps within the purpose and the performance will be assessed annually to pursuer needed improving performance. Planning implementation methods and procedures are necessary to the day to day operations of building the dream a reality. In that position, Novotel challenges in product improvement, selling accounting and human resources management as they aim to meet the company’s long term essential objects. With the focus on completion, Novotel should emphasize product improvement in order to meet the needs of a more significant part of the market. According to research, some improvements follow:

To improve teamwork and improve their people in a high-performance organization.
To achieve an excellent experience for all customers.
To develop the financial performance of the organization and present for their shareholders.
To support and develop their performance quality of processes.

Conclusion and recommendations
Based on the analysis, the resulting conclusions can be drawn on the variety, size and future of Accor hotel group and Novotel brand used as an example. In the hotel industry, Accor faces one of the most contemporary problems in the service sector – the shortage of employees, increasing more rapidly than ever in the United Kingdom. The guest loyalty and customer service are the one most significantly and negatively impacted from those changes. The poor service experience explains why customers shifting brands. Companies should focus on their signature offerings and individual bundle options as to when targeting those guest segments, who are still willing to pay for a premium travel and luxury accommodation experience. Due to that business environment, Accor must be careful when considering and making decisions about their pricing and advertising strategies. Reducing prices as a reaction to the recession is never good for business in the long term but also could impact the brand image. Through business strategy, Accor Group shows the best success when received the highest revenue of revenue up 27.8% to €1,926 million (+4.8% LFL). (Group.accor.com, 2019). The company have already presented its new business model to support and achieve the organization objectives. The possibility of future and further business expansion will make the organization stronger. On the long term, Novotel London Excel looks very stable and competitive to other hotel and having a good future.
Accor will be a global leader shortly. It makes a constant focus on the long term, sometimes taking blind action but never excessive risk.

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