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January 24, 2013

Accor steps up expansion plans in India

European hotel company Accor plans to open 57 hotels across its five brands in the next five years in India as part of its expansion strategy.

By admin-demo

European hotel company Accor plans to open 57 hotels across its five brands in the next five years in India as part of its expansion strategy.

The group, which owns the Formula One budget brand, Ibis economy hotel brand and upmarket brands such as Novotel, Sofitel and Pullman, has invested $250m for the expansion.

It has also entered into several partnerships, including an agreement with Interglobe for the opening of Ibis hotels across the country, reported Business Standard.

Although India currently does not contribute significantly to the company’s total revenue, this is expected to change by 2015.

"We see a lot of opportunity and our strengths are in three distinct segments – upper midscale, economy and budget."

Accor India operations senior vice-president Jean-Michel Casse was quoted by the publication as saying that Accor has been operating in India on and off for the last two decades, with limited success.

"We realised we will be taken seriously only when we invest money," Casse added.

The company’s strategy is to initially establish its brands in the market and then after reaching an adequate number of properties, it intends to divest while retaining the management rights.

Accor is confident that, despite delays, it will be able to have at least 50 hotels in operation by 2015.

"We see a lot of opportunity and our strengths are in three distinct segments – upper midscale, economy and budget," noted Casse.

The Novotel and Ibis brands are considered to be the growth drivers in India.

Accor has customised Ibis to suit the Indian market and has tied up with third-party restaurant brands for food and beverage options.

Now, the hotel group is taking similar steps for its budget brand, Formula One.

With the slowdown of the Indian economy, the hotel chain expects to take longer to expand in the country.

It is also being cautious in signing management agreements to ensure that developers have adequate budget.

Accor has 3,500 hotels across the world, of which more than 500 are in Asia-Pacific.

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