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Accenture Hospitality Service for Marriott

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Accenture plc (ACN) signed an outsourcing deal with bellwether hotelier, Marriott International Inc. (MAR), last week. Financial terms of the contracts were not divulged.

Per the contract terms, Accenture will provide its Finance and Accounting (F&A) services to Marriott International for 10 long years. To give a better shape to the services, Accenture will collaborate with Marriott Business Services (:MBS) unit, a wholly-owned subsidiary of Marriott, engaged in managing F&A operations. As per Marriott, its MBS unit lacks Accenture’s economies of scale and wide industry exposure. With Accenture’s services, operational costs of managing F&A for the hotels and resorts under the Marriott-brand will be lowered.

Leveraging MBS’ expertise and capabilities, Accenture will form a new business service namely, Accenture Hospitality Services (AHS). AHS will not only serve Marriot but also other companies in the hospitality industry.

Gradual economic recovery has resulted in an upside in the hotel industry. Industry experts also expect major hoteliers to expand internationally. Expansions generally complicate management of business operations across different countries. With AHS, Accenture will now have a better understanding of the hotel industry, thus creating room for similar deals in the future.

Over the past few weeks, Accenture has won a number of deals. Accenture helped Japan-based apparel retailers United Arrows to develop a new system to manage its merchandise. Apart from this, Accenture also won a management consulting service contract from Elm, a Saudi Arabia-based company engaged in providing secure e-business, IT, project support and government outsourcing services. Under the terms of the contract, Accenture will provide consulting services to Elm’s newly set up unit, Elm Learning, Training & Development Solutions (Elm LTDs). We believe that all these will drive solid top-line growth.

Currently, Accenture has a Zacks Rank #2 (Buy). Investors may also consider other stocks in the sector that are performing better. Information Services Group Inc. (III), with a Zacks Rank #1 (Strong Buy) and Towers Watson (TW) with a Zacks Rank #2 (Buy) are worth buying.

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