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Corporate strategy

Assignment 1

The Tourist Accommodation Industry in France

David Mannion 25%


Gabriel Maldonado Toro 25%
Tala Mansour 25%
Magdalena Martin 25%

Corporate Strategy E19


Assignment 1
1. The tourist accommodation industry in France

As a country, France offers a fabulous historic heritage and probably the most diversified natural
environment of any country in Europe. In addition, France has the necessary tourism
infrastructure to cope with its status as leading tourist destination, more hotels and campsites
than any other country of Europe, probably more gites or holiday cottages. Many tourism
accommodations companies have as objectives each year attract tourists from all over the
world. Along this lecture we will talk about their strategics criteria, key of success factors and
their value chain.

Figures of tourism in France between 2015 and 2017

Arrivals of foreign tourists in France will sore in 2018 after reaching record levels in 2017 with
more than 88 millions arrivals in the country. In 2017, in the summertime in metropolitan
France, overnight stays have increased by 6.1% after decreasing by 2.9% in 2016. The rebound
was especially high in urban area and Greater Paris (+12.7%).

Hotels and Campings are the most successful accommodations

2. Segmentation of the sector and their KSFs

After discussing with each other we chose 4 segments :

- Hotel and youth hostel.


- Airbnb and Apartment Rental
- Holiday Village
- Camping and Couch Surfing

Corporate Strategy E19


Assignment 1
a. Hotel and Youth Hostel

Hotel
A hotel is a commercial establishment that provides accommodation, meals and other guest
services. These establishment must have at least 6 letting bedrooms which 3 of them must have
ensuite private bathroom facilities. Hotels are classified into stars categories (1 to 5), there isn’t
methods of designating these ratings, and compliance with customary requirements are
voluntary.

Youth Hostel
A youth hostel is a place which provide budget-oriented, sociable accommodation where guests
can rent a bed, in a dormitory and share a bathroom, lounge and sometimes a kitchen. Rooms
can be mixed or single-sex, and private rooms may also be available. Hostels are often cheaper
for both the operator and occupants; many hostels have long-term residents whom they
employ as desk agents or housekeeping staff in exchange for experience or discounted
accommodation.

Strategic Segmentation

Product
More than a single product, Hotels provides multiple services. These services go from lodging in
a short-term basis, to provide bar, spa and laundry services. Just like the hotels, youth hostels
provide lodging not only in a short-term but also in a long-term. Youth hostel provide services
such as lodging, laundry, kitchen facilities, etc.

Technology
The technology in the hospitality industry is advancing at a faster pace than ever before and this
is changing both the expectations of patrons as well as the way in which the hospitality industry
conducts its business. Some of the latest trends in technology are Wi-Fi infrastructure
overhauls, Digital conferences facilities (hotels), Mobile communication and automation,
integrated seamless experiences, feedback on social media, cloud services, etc.

Market
The market of the hotels is very big, and basically depends on its location and how developed is
the local tourism. Anyone who wants to acquire tourism services / short-term lodging services.
Youth hostels market are basically young travellers and internship students who need to stay in
a country nor city for the semester.

Corporate Strategy E19


Assignment 1
KSF of the segment

Customer Service
Dedication to customer is crucial to the business, especially in the social media era were
negative feedback can harm the business. On tourism area, the customer service should always
put on priority.

Security
This topic is very important because people need to know them belongs are safe wherever they
go, and especially in the place they’re lodging for short or long term.

Brand Image
How the world sees the business is crucial, so the brand positioning in the public has to be
positive, because this will matter at the moment when the client have to choose between
different places to lodge.

People
Since this business lodge human beings, the relationship between employees and the guests
has to be in the most cordial way possible, also the organizational environment has to be very
positive, because if the workers are happy then they’ll bring the clients a positive service.

Innovation and Learning


Is Necessary to keep innovating in different topics of the service like training for the personal,
new infrastructures and technologies.

Competitive system matrix: Volume Industry

The accommodation industry have a Volume competitive system because they are based on
targeting a large number of people and with the network of contacts that they have, they are
able to expand to many places in France. For example, hotels in France have some that have
such a well-positioned brand in the mind of the consumer. these are the first option when
choosing a place to stay in France, regardless of the city they go to, they will prefer this hotel for
the trust and support it has, since the added value that can differentiate it from other types of
Hotels is little, that is why it is so important that all the service offered is perfect, and that the
consumer can associate quality and perfection with the name of the hotel chain.

b. Airbnb and Apartment Rental

Corporate Strategy E19


Assignment 1
APARTMENT RENTAL - AIRBNB
By literal definition an apartment is a self-contained housing unit (a type of residential real
estate) that occupies only part of a building, generally on a single level. Such a building may be
called an apartment building. Apartment rental is a very common form of accommodation for
tourism purposes. Apartment rental services include booking.com, rent.com,
www.pararius.com, appfrance.com to name but a few. The most successful and popular
company in terms of Apartment Rental in recent years has been Airbnb.

AIRBNB

AirBnb is a rather new means accommodation industry in France, relatively speaking. The
service joined the Market in 2008. AirBnb is, in literal terms is a company which fosters the
rental of properties for hospitality purposes and has blossomed in recent years. “To get (rent)
an Airbnb” is a phrase that has recently entered common dialect, meaning to avail of the
services offered by this successful company.

The Company

Airbnb is an American company which operates an online marketplace and hospitality service
for people to lease or rent short-term lodging including holiday cottages, apartments,
homestays, hostel beds, or hotel rooms, to participate in or facilitate experiences related to
tourism such as walking tours, and to make reservations at restaurants. The company does not
own any real estate or conduct tours; it is a broker which receives percentage service fees in
conjunction with every booking. Like all hospitality services, Airbnb is an example of
collaborative consumption and sharing. The company has over 4 million lodging listings in
65,000 cities and 191 countries and has facilitated over 260 million check-ins. (1)

Value Creation

Airbnb can be accessed via either its websites or mobile apps for iOS, Apple Watch, and
Android. Registration and account creation is free. On each booking, the company charges
guests a 6–12% guest services fee and charges hosts a 3–5% host service fee. Hosts can also
offer "experiences", such as excursions, to guests for an additional charge, of which Airbnb
takes 20% as a commission. (2)

Strategic Segmentation of Airbnb (3)


Corporate Strategy E19
Assignment 1
Product
Airbnb is solely a service provider, there is no physical product. Its various services include
(primarily) accommodation rental services. In recent times it has included organised tours
(described below) to provide the ‘all-in-one’ service to tourists.

Technology
Airbnb uses the world wide web as well as penetrating the smartphone industry with iOS and
android apps for easy-access for its consumers. It avails of Google Maps (GPS) technology to
show locations of properties for rent.

Market
The market of Airbnb is Worldwide and anyone who wants to avail of tourism services / short-
term property rental services in terms of its consumers.
It also provides an Advertising Services to Clients to want to Rent out their properties on a
short-term basis. It provides the service whereby those clients want to advertise their
properties online.

KSF of Airbnb

As previously mentioned, in an extremely competitive environment Airbnb has excelled proved


a dominant market player in its segment in a very short period of time and below are some of
its Key Success Factors.

Facilitation instead of Control


Airbnb as a company itself doesn't invest in property, though connects (private) owners of
existing property (which may be rented out for leisure / tourism purposes) to people who see
the need to rent it. The platform works as an intermediary with a client base, which may grow
exponentially, through a (relatively) non-capital-intensive strategy. The great challenge of a
platform is the need for two sides: the demand and the supply. The art of starting a platform is
to realize a healthy balance between them. (4)

Use the newest technology optimally


Many activities we perform by using platforms nowadays, aren't new. Sharing has always
existed. Platforms only lower the thresholds. For example, transaction costs are lowered, and
strangers may be trusted, thanks to reviews and reputation scores. The added convenience
fosters a rapid increase in usage. (4)

Ease of use (6)

Corporate Strategy E19


Assignment 1
Airbnb built an exceptionally user-friendly site that took the pain out of discovering and
booking accommodations (I find Airbnb easier than most hotel searches). No shady exchange of
cash or hours spent surfing inconsistent listings on Craigslist - everything was listed in a uniform
way, search/comparison is intuitive/simple, and payment is handled online. Linking your credit
card ensures you that you don't have to give the payment process a second thought.

Extreme focus on creating convenience


Airbnb is a lodging alternative for travelers who are looking for a unique experience at a low
price. And for college students, Airbnb offers a very convenient way to travel. But the
convenience comes at a price, usually paid by the host and residents who live in popular tourist
destinations. Airbnb poses a legitimate threat to the hotel industry, although the company does
not operate like a hotel in a legal sense. This means that hosts are not required by law to
maintain their property, nor are they due compensation if a guest damages their property.
Without standard hotel regulations, guests can also be left in dangerous situations regarding
neglected properties. Airbnb can act as a gentrifying force in desirable cities, forcing long-time
residents to move out because they cannot keep up with rising rents. With Airbnb, the cost of
lodging goes beyond the one-night fee. (5)

Think in categories, not in niche Markets


With a view to differentiating itself from other Apartment Rental companies, Airbnb added
another category to its operations as an organization, to exit the niche market of
accommodation. It added a ‘category’.

Airbnb is aiming at the complete travel experience and not only at accommodation level; hence
the platform now offers tours. This way platforms embrace the opportunity to become the all-
in-one solution in their category, and that doesn't leave much space for competition. (4)

Brand
Airbnb did an excellent job curating listing on the homepage, so the site became more than
"renting a spare room" and instead was about discovering cool/quirky/creative properties.
Surfing Airbnb became a leisure activity for some, but more importantly these premier listings
made it socially acceptable to tell everyone you were staying at an Airbnb place, and thus
increased word-of-mouth (many friends of mine prefer Airbnb when traveling for work b/c they
can find amazing properties if given hotel-sized budgets). (6)

Competitive Systems Matrix – Airbnb

Airbnb as regard both a company and as a segment of the tourist accommodation industry in
France would be categorized as a Volume Industry in the Competitive Systems Matrix.

Corporate Strategy E19


Assignment 1
There is direct competition. Apartment rental services include booking.com, rent.com,
www.pararius.com, appfrance.com to name but a few. The competitors have the same strategy;
cost reduction.
Its main characteristics include:

- Simple and standardized offer: Apartment Rental services.


- Product/Service with no real differentiation; Apartment Rental services
- Low Value Added; On each booking, the company charges guests a 6–12% guest services
fee and charges hosts a 3–5% host service fee.
- Large Market: International, anyone who wants to avail of / advertise Property Rental
for tourism purposes.
- Logistics & Marketing: Airbnb uses the marketing incentive whereby an account holder
receives a discount if they recommend to a friend successfully.

Objectives of Airbnb

- Costs: Airbnb’s commission I higher than competitors, they can afford to do so due to
volume of clients and commission. (8) Its services are higher demand from clients and
consumers.
- Benchmarking: Airbnb has created an extremely successful benchmark in a short period
of time. It analyzed its competitors, which have existed long before Airbnb were in
existence. It is now a well-known household name.
- Learning Effects: With regards to its clients and consumers, Airbnb gives extreme
emphasis to ratings of clients (proprietors and tourists) and learns from them. Some
proprietors will be removed due to terrible tourist ratings if properties are below par.
Having only been in existence as a company for 9 years, Internal and External company
analysis has clearly been of excellent standards to become the entity it is today.

As a result of the above analysis of Airbnb as a segment of the accommodation tourism industry
in France, it is safe to say that Airbnb falls in the higher end (y-axis) of the Volume Industry on
the Competitive Systems Matrix.
It is strong in terms of Sustainability of Competitive Advantage and at the same time relatively
high on the matrix in terms of quality service and technology.

c. Holiday Villages

Corporate Strategy E19


Assignment 1
According to INSEE, a holiday village “is considered as being any globally-run set of
accommodation of a commercial nature or not, intended for holidays and recreational stays on
an all-inclusive price basis including the supply of meals or individual facilities for preparing
them and use of collective facilities for recreational sports and cultural activities”
A Holiday village includes individual or collective accommodations as well as facilities for
management and services, common facilities for sports activities and entertainment they offer.
Regarding meals, there always is a restaurant or a private kitchen in some accommodations.

Statistics
Last year in 2017, according to INSEE, there were 917 holiday villages identified in France. The
occupation rate was of 51.6% for the year and the number of nights spent in Holiday Villages in
million was of 19.2.
In 2018 there are currently 921 Holidays Villages that have been identified in France.

Value of Holiday Villages


Holiday Villages and Tourist Residences main customers are families mainly employees or
people holding a high position. Thus, customers come mainly from a higher socio-professional
category.

Strategic Segmentation

Product
Holiday villages offers a wide range of products in addition to the accommodation. Everything is
designed so customers always stays in the complex. There usually are swimming pools,
restaurants, bars, a private beach, activities such as excursions or sports organized for
customers, a park for children, shows at night...

Technology
Most of holidays are now booked on internet and less with travel agencies. Nowadays there
even are digital companies specialized in that field. On lastminute.com for instance, you can
book holidays anywhere in the world in the holiday village of your choice. Plus, people tend
more to buy their holiday journeys online to avoid paying travel agency fees.

Market
This market is mainly in developed in warm countries were living feels good and where people
usually go to get relaxed and spend great time with their families. We will mainly find holiday
villages near seaside resorts.

KSF of the segment


Corporate Strategy E19
Assignment 1
- Customer service
Being dedicated to customers is very important and can bring very much to a company,
especially in that social media era were a bad buzz can go very fast. Also, for tourism industry,
customer service should always be put on priority.

- Number of services linked to the product


One of the KSF of this segment is to offer high-end journeys for families in luxury places as well
as the possibilities to have all-inclusive journey, a wide range of activities and entertainment for
their customers so they don’t have to worry about anything.

- Frequency
As customers usually spend a lot of time in holiday villages, encourage them to take part in as
many activities as the resort has to offer is a great key factor success for companies.

- Brand Image
The brand image is very important for each company specialized in this sector as depending
what the company offers, it’s not going to target the same customers. For instance, Center
Parks will target families and people interested in environment and countryside but Club Med
will target those interested in going abroad to sunny destinations.

- Marketing Positioning
Marketing is a huge point for this industry as this is the tool each company will use for
differentiation. there will be companies offering journeys for families (Pierre & Vacances,
Belambra, Club Med…) or for couples and young adults such as Voyageprivé.fr.

Competitive System Matrix of Holiday Villages

In the Competitive System Matrix, Holiday Villages would be identified as a Specialized Industry.
There is no direct competition or a few as competitors all have their own strategy as this
segment could be identified to luxury travel with high quality service.

Main characteristics are:

- Complex offer
Customers for holiday villages are all different and they all have their own expectations of
holiday village so each company can have a wide range of offer, with different destination,
accommodation style...

- Many possibilities to segment the demand

Corporate Strategy E19


Assignment 1
As I just wrote, Families, couples and youngsters all have a different taste and expectations
regarding destinations and the service provided, so the demand can be segmented again to
define the right audience companies will target.

- Product/Service with high value added


Holiday villages usually provide high-end journeys with aiming to satisfy their customers on
every aspect of their stay. They usually offer all-inclusive journeys with lots of activities during
the day, entertainment for children, and shows at night.

d. Camping - Glamping Hub Company

We will talk about the camping accommodation that is part of a major type of accommodation
very used as well as Hotels. Camping is generally associated to a free way of housing.
However sometimes, camping can be transformed as paying service for the benefit of
companies; we will talk about what type of service is offered and mentioned the company
Glamping Hub, actor of a lucrative camping service.

Camping
In definition, if we give a sense to the word “camping”, it will be “camp” defined as an outside
place where an army or other group of persons or an individual is lodged in a tent or tents or
other temporary means of shelter. And so, it creates the action of “camping”. Generally,
participants leave developed areas to spend time outdoors in more natural ones in pursuit of
activities providing them enjoyment.

Some statistics (9)


Last year in 2017, more than 8,4 millions establishments were offering camping services in the
French territory, compared to 97,2 millions of furnished establishments. A furnished
establishment in the tourism language is a villa, an apartment, a "gite" or a furnished studio, for
the exclusive use of the tenant, offered for rent to a passing client who makes a stay
characterized by a rental by the day, the week or the month, and who does not live there.

According to statistics, between the second trimester of 2016 and the third trimester of 2017,
116,5 millions of camping nights in France were spent by tourists in nude locations (without any
equipment) and 120,2 million nights were spent in equipped locations. Recently, we can see
that the camping in nude locations wins over equipped locations with 48,1 million nights over
47,7 millions nights during the last semester of 2017.
Those numbers show that even passing nights in nude locations can be successful for some
campers.

Existing forms of Camping: Adventure Camping, Dry Camping, Backpacking, Canoe Camping,
Bicycle Camping, Car (Van), Off-Road and Glamping
Corporate Strategy E19
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Value of the Camping accommodation type
Camping can be practiced by everybody, almost anywhere and with low budget. For sure,
people and tourists who had chosen this type of accommodation may get a minimum of
knowledges of the outdoor life (more needed when the nights are continuous). Indeed, a
camping night took of a lot of resources, materials resources, that people are used to have
when they are home. But camping is an adventure and also camping as said below is
characterized as an activity, providing hours of enjoyment and a welcome opportunity to
connect with loved ones, as well as nature.

Camping as a lucrative service

EXAMPLE OF THE COMPANY GLAMPING HUB: LUXURY YURT RENTAL

Glamping or glamorous camping, is an up-and-coming trend that allows travelers to think off
usual conventional lodging and take a new perspective on traveling.
Taking the same concept of Airbnb, Glamping Hub company is an outside accommodation
rental services. It offers different type of accommodations as well as letting the consumers
choosing freely their destination according to the desired accommodation. Company is aiming
travelers desirous of benefiting a comfort outdoor experience.

Strategic segmentation of Glamping Hub


Here, the strategic segmentation related to the company Glamping Hub will lie down on three
main criteria:

● Products/Services
Glamping Hub is only focused in offering services, not any products. As services we are talking
about outdoor accommodations proposed by the company extended on its interactive website.
Their services are categorized by types, that we will talk about further below.
● Clients
Let remember that Glamping Hub is following a BtoC (Business to Consumer) marketing.
The company is aiming clients from all over the world, all nationalities confounded. Throughout
these clients, we are finding several characteristics of a Glamping Hub client. Generally they are
travelers, with financial resources and an eco-friendly mind. If we look their prices palette,
prices are extended go to minimum 79€/night up to 260€/night.

● Geographical area
Most of its destinations are over open into natural environment out from the urban world.
Glamping Hub let the choice to the consumers to refine their needs by accommodation type
Corporate Strategy E19
Assignment 1
but also by destinations. The company touch the 6 continents on the market: North America,
Australia, Europe, South America, Africa and Asia.
The flexibility of areas that the company offers make it a big benefit and more chance to touch
more than one people segment.

KSF of Glamping Hub

● Many types of glamping (accommodation) (10)


Destined for all taste, budget and personality, the company rents the following
accommodations: Tree Houses, Yurts, Tents, Campervans, Tipis, Villas, Caves…
This large

● Beautiful destinations
● Technology, website ergonomics
● Ecology

3. Competitive systems matrix

Glamping Hub is adapted to a specialized industry, offering unique prices, proposing services
with high value-added, and with quality. The company specialized on luxury yurt rental is
located into a sector with a few level of competition.

References

The tourist accommodation in France


https://about-france.com/tourism.htm
Corporate Strategy E19
Assignment 1
https://www.insee.fr/en/statistiques/3310683
Xerfi : Les résidences de tourisme et les village de vacances

Hotels and Youth Hostels


http://turismososteniblemedia.com/category/casos-de-exito/casos-exito-hoteles/
https://www.hosteltur.com/comunidad/005530_5-pasos-para-el-exito-de-tu-hotel.html
http://blog.inturea.com/hoteles-con-más-éxito-en-redes-sociales
https://en.oxforddictionaries.com/definition/us/youth_hostel

Holiday Village
https://www.insee.fr/en/metadonnees/definition/c1216
https://www.insee.fr/fr/statistiques/3303636?sommaire=3353488
https://www.insee.fr/fr/statistiques/2012688#tableau-TCRD_018_tab1_departements
https://www.insee.fr/fr/statistiques/3303636?sommaire=3353488
https://fr.statista.com/statistiques/493579/offre-etablissements-touristiques-france/
http://www.businessdictionary.com/definition/hotel.html
Course : Lecture 2 - 4. Competitive Systems

Airbnb and Apartment Rentals


(1) https://press.atairbnb.com/about-us/
(2) https://www.airbnb.com/help/article/1857/what-are-airbnb-service-fees
(3) https://learn.kedgebs.com/webapps/blackboard/execute/displayLearningUnit?
course_id=_27452_1&content_id=_1755439_1
(4)
(5) https://www.linkedin.com/pulse/5-success-factors-online-platforms-like-uber-airbnb-
martijn-arets
(6) http://www.fsunews.com/story/life/2017/01/22/airbnb-cost-convenience/96922614/
(7) https://www.quora.com/Why-is-Airbnb-successful
(8) https://learn.kedgebs.com/webapps/blackboard/execute/displayLearningUnit?
course_id=_27452_1&content_id=_1755439_1

Camping - Glamping Hub Company


(9) https://fr.statista.com/statistiques/493579/offre-etablissements-touristiques-france/
(10) https://glampinghub.com/types-of-glamping/

Corporate Strategy E19


Assignment 1