Opening up of national borders in countries such as China will also provide massive new markets.
Economic: Expansion into emerging markets is needed as the economies of Europe and North America are relatively stagnant. Massive economic growth is occurring in emergent economies, with special emphasis on the development of a middle class.
So Europe as a whole (including France) has a total of about 50% of Accor's business, but the Asian market has only 9%. Considering the populations of Asia and their growing middle class, this seems a somewhat skewed proportion with ample room for improvement.
The Accor Board is planning on continued expansion with 10,000 rooms per annum over 2007/2008. This represents a fairly modest 2.2% rise per annum. This growth is planned across both established markets, such as in Europe and North America, and emerging markets in the developing world, such as Latin American, the Middle East and Asia.
The country chosen for expansion in the established market is Switzerland. The brand that will be expanded is the budget ETAP band. Switzerland is a logical and promising choice for the following reasons.
"Switzerland's economy is based on a highly qualified labour force performing highly skilled work. The main areas include micro-technology, hi-tech, biotechnology and pharmaceuticals, as well as banking and insurance know-how. Most of the people working in Switzerland are employed by small and medium-sized enterprises, which play an extremely important role in the Swiss economy." (www.swissworld.org)
2) Accor already has a presence within the Swiss economy, although not as large as it might be within the economy hotel market. This provides room for expansion where name recognition already exists.
3) Switzerland increasingly relies on the tourist industry as some other sectors of the economy have recently stagnated.
PESTEL factors are important here because of the growth in the European Union (Political/Economic/Social) and the growth in the computer industry in general and the internet in particular (Technological). These combing to make Switzerland an ideal site for opportunity and growth for Accor.
Choice of Brand
The brand chosen is the ETAP brand.
Accor currently has 283 hotels throughout