Mobile payment will shake the hospitality sector – Accorhotels CEO
The conventional wisdom is that the hotel groups are busily growing as fast as they can to withstand the threats from the online travel agents.
For Sebastien Bazin, the CEO of Accorhotels, one of the largest hotel operators in the world and the largest outside the US, the threats are more deep-seated, however, and it is the mobile payment that he sees as the greatest threat.
“Mobile payment is probably two or three years ahead of the rest of the world in China,” says Bazin. “And in China, there are two means of payment – Alipay which is Alibaba, and Tencent, which is the owner of Wechat. It is absolutely evident that in two years, 90 percent or maybe even 100 percent of transactions in China will be mobile payment driven, and that means no cash, no credit card.”
Forbes estimated last year that “Alipay, developed by e-commerce giant Alibaba’s affiliate Ant Financial, already boasts 520 million users, while Tencent’s TenPay counts 400 million.”
“It means that in the travel industry I can tell you as a matter of certainty that in five or six years, 100 percent of travel transactions when it comes to travel will be mobile. And the technology exists in China, US and maybe Israel. And guys like us had better adapt. If we don’t have the terminals for accepting those payments, we’re in trouble. And the cost of competing is too high for me to pay because the people who invented the technology have 30,000 engineers, and I have maybe 1,000. So I can’t compete, and even if I did, by the time I catch up they would have moved on, so we have an obligation to partner in the next 12 or 18 months with either someone in the US or China, because I can’t invent it. So it’s mobile payments which will shake the hospitality place. And we have to do that because clients want it.”
For the powerful Online Travel Agents (OTAs) such as CTrip in China, Expedia in the US and booking.com in Europe, Bazin thinks that the real threats will come from interactive technology and sspecificdevices in the home.
He believes that devices such as Google Assistant, Amazon Echo using Alexa, and Apple HomePod with Siri will interrupt the dominance of big online travel agents OTAs.
“Google is already the biggest travel referrer, which is why Trip Advisor’s market cap has gone from 13 billion to seven billion in the last 18 months.”
Bazin says the devices in the home will “…record the way you talk to your wife, the way the children talk to you, the way you interact with your banker if you own him any money, whether you are in a bad mood, whether you need some rest, and before long those devices – the Google Home, the Android, the Microsoft, the Amazon will jump and interrupt my life and interrupt Ctrip, Booking and Expedia.”
The move to mobile payments is also being seen by travel managers organising the travels of many business people (Consumerisation reaches corporate payment segment), but Bazin still believes Accorhotels will be in a strong position, by virtue of its size, diversification, the data it holds on tens of millions of customers and its bricks and mortar position in the centre of many neighbourhoods, around which it is building its Accor Local initiative powered by its acquisition of concierge service John Paul.
Courtesy accorhotels.com