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French multinational hospitality chain Accor, one of the largest hospitality chains in the world, aims to significantly expand its presence in India over the coming years. Currently operating 62 properties with over 11,000 rooms across nine brands, Accor plans to add 30 new hotels totaling around 5,500 rooms in the next three to five years.
Accor entered India in 2004 and today boasts a substantial portfolio spanning luxury, premium, mid-scale and economy segments. Its brands include Raffles, Fairmont, Sofitel, Pullman, Grand Mercure, Novotel, Mercure, ibis and ibis Styles. Novotel and ibis have a strong focus on meetings, conventions, weddings and social events in India.
Accor expects to launch its Raffles Jaipur hotel this year. It will also consider introducing other luxury brands like Orient Express in India. The Novotel and ibis brands from the Accor portfolio in India have an extremely high brand recall and a strong focus on the meetings and conventions market, as well as the weddings and social event market. The company is betting on India's growing middle class and advances in technology and telecommunications.
Some of the cities where the new properties will come up include New Delhi, Bhopal, Indore, Chandigarh, Mohali, Bhubaneswar and Amritsar. The conversion brands focus on bringing existing hotels, which "need to be brought up to international standards and requires the international distribution" under the Accor umbrella and provide benefits of features like the loyalty programme that it has.
It is anticipated that more luxury hotels under brands such as Fairmont, Raffles, and Sofitel will open in India in the coming years, in addition to properties representing other brands from Accor's luxury and lifestyle portfolio. The company established its luxury and lifestyle division around 18 months ago, which now comprises around 550 hotels and 24 brands including brands such as 25hours, Delano, Mondrian, Mama Shelter and MGallery.
Accor opened Raffles London at The OWO, London's most expensive hotel last year in association with the Hinduja Group. It opened 291 hotels adding 41,000 rooms to its portfolio last year. It aims to open a similar number of properties totaling 48,000-50,000 rooms in 2022. The hotelier hired 120,000 new employees last year.
Founded in 1967, Accor has one of the industry's most diverse hospitality ecosystems, from luxury to economy, as well as lifestyle. Globally, Accor operates over 5,500 properties under more than 40 brands in more than 110 countries.
Sebastien Bazin, Chairman and CEO of Accor, believes India should have over 1,000 Accor-branded hotels given its large population. He said the company will need more local staff over time to take on greater responsibilities. Bazin sees huge potential in India given its rapid economic growth and expanding middle class. Based on the enormous growth seen in the tourism sector, Bazin has made a commitment to the shareholders and analysts to grow by 9-12% every year for four years.
The hospitality sector in India is experiencing a significant resurgence in hotel investment activity, with transaction volumes witnessing an impressive 80% annual increase in hotel transaction volumes at USD 78 million, in the first quarter of CY2024, according to the latest report by JLL. According to JLL's market analysis, the sector has been witnessing a good surge since the calendar year 2023.
A record number of hotel signings and openings took place in 2023, with 25,176 keys signed and 12,647 keys opened. There is an increasing interest in hotel development activity in Tier-2 cities, with 54% of the total signings taking place in these locations. In 2023, Hotel Investments in India touched USD 401 million, nearly four-fold the volumes witnessed in 2022, JLL reported.
In summary, with its ambitious expansion plans and bullish outlook on India's growth potential, Accor looks well-positioned to significantly grow its presence in the world's second most populous country over the coming years.
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