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How the hospitality industry can increase agility to compete

Freeing funds to invest for competitiveness and profitable growth

Overview

Amid mergers, acquisitions and overall industry disruption, the hospitality industry is facing a push/pull of consolidation and growth. To successfully compete in this volatile business climate, companies must increase agility to respond quickly to changing business and economic conditions. Accenture research shows that hospitality executives know the benefits of reducing costs, increasing competitiveness and reinvesting cost savings into growth, but only a quarter strongly agree they are positioned to deliver those outcomes.

Accenture surveyed hospitality executives and hospitality industry analysts to learn opportunities and obstacles on the journey to competitiveness.

Increasing Competitiveness

Hospitality executives recognize they need to free up funds to reinvest for growth:

When asked what outcomes are driving the focus of cost management activities, 55% say "improving competitive advantage"

82% agree or strongly agree "our business is now focused on cost reduction to free up funds to invest in growth initiatives"

Hospitality businesses are taking action to free up funds and improve margins, but only about a quarter say, "our business achieves the optimum balance being agile and being lean."

Hospitality businesses are taking action to free up funds and improve margins, but only about a quarter strongly agree, "our business achieves the optimum balance being agile and being lean."

WHAT’S IN THE WAY?

Inflexible operating models, difficulty scaling savings and challenges with prioritizing investments prevent hospitality companies from unlocking funds to reinvest in growth.

DIGITAL IS KEY

Hospitality executives see digital investments as an enabler of cost reduction and advanced operating models.

47%

Digital technologies is a top area for reinvesting cost savings, along with expanding into new sales channels
(both cited by 47%)

78%

say technology is an enabler of sustainable cost reduction

84%

say digital business is an enabler of strategic growth

86%

say digital strategies are an enabler of advanced operating models (e.g., global business services)

Funding growth

Pursuing three steps can help hospitality companies strategically reduce costs to reinvest in future growth:

1. Get lean to free up funds

Hospitality companies today must be lean and agile to respond to customer demands and keep up in an ever-changing marketplace. A flexible operating model can enable this agility.

2. Prioritize areas of investment

Reinvest savings in digital to work efficiently, maximize customer insights and improve omni-channel experiences, thus enabling growth.

3. Execute effectively

Cut out the non-core capabilities, or move them to a shared services model where you can achieve cost savings at scale. Invest in capabilities that will support the needs of a digital business.

About The Research

C-suite executives and analysts in 9 geographies and 13 industries surveyed

Accenture conducted quantitative and qualitative research across 13 industries and 9 geographies to analyze the challenges and opportunities associated with creating cost-competitive operating models and reinvesting in growth. Fifty-four percent of respondents were C-suite executives or CEOs of business units. In parallel, Accenture interviewed 65 industry analysts across these industries to understand what external stakeholders measure, value and expect from the companies they cover.

Industries included: Automotive, Banking, Chemicals, Communications, Consumer Goods, Energy, Health, Hospitality, Industrial Equipment, Pharmaceuticals, Medical Technology, Retail and Utilities.

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@AccentureTravel

To learn more, view the cross-industry research report.

DOWNLOAD RESEARCH REPORT

About the authors

Janet Brashear

Janet Brashear

Managing Director, Accenture Hospitality &
Travel Practice Lead

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Emily Weiss

Emily Weiss

Managing Director,
Accenture Hospitality

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