PurchasePro Inks Deal With Accor

LAS VEGAS— Accor Economy Lodging (AEL) inked a five-year license agreement with PurchasePro to implement its e-Procurement software throughout AEL’s 1,200 hotels based in the United States. The deal, which brings 100% of AEL’s suppliers online, will ultimately allow AEL’s properties in the U.S. to conduct $100 million in purchasing online (including FF&E). At ramp up, the system is expected to process approximately $50 million in purchasing. Thirty-five AEL properties are already using a bare-bones version of the purchasing system from PurchasePro. In fact the deal followed a successful 90-day pilot test that demonstrated the benefits of the e-procurement software. A staggered rollout of the complete online commerce network will take place beginning in October, with completion slated for the end of 2002, according to Kris Richardson, vp/procurement for AEL It will include the Motel 6, Studio 6 and Red Roof Inns brands. “Sofitel and Novotel will also begin using the system by the end of next year,” said Richardson. In addition, AEL plans to roll in its franchisees next year. She noted that the system was appealing to AEL not only for its cost savings, but also for its internal process improvement at AEL hotels and on the corporate level. Savings in most cases “were process related,” said Richardson. “It allows us to see what we are ordering before we order. We found by using the pilot that we don’t have as many mix ups, wrong orders, etc.,” she noted. AEL expects to do all of its FF&E purchasing on the system in addition to its operating supplies, which means the system will incorporate all of its FF&E suppliers as well. Many of Accor’s suppliers were already on the PurchasePro network, said Allen Winder, evp/COO of PurchasePro. “[The suppliers] actually assisted us in selling this deal because they were already working with us,” he said. Winder said PurchasePro will begin working with AEL on its e-Source technology, which features online auctions controlled by the buyer. He said he expects the e-Source software to work particularly well for AEL’s Motel 6, Studio 6 and Red Roof Inns hotels, as they are limited service brands that purchase many items in bulk. According to Richardson of AEL, the company expects to accomplish full payback on the e-procurement system within one year of full implementation. Given that the installation is complete by the end of next year, AEL will have saved what it paid for the system by 2003.