Accor continues to expand presence in India

Majority of future growth through management agreements

Europe-based Accor, a leading hotel operator, has been one of the most aggressive players in the Indian hospitality sector. The group opened three Novotel properties--Pune, Goa and Ahmedabad--in the fourth quarter of 2013, and plans to open atleast 13 more hotels in 2014. Senior executives from the company said that they are on track to touch its target of 50 hotels in India by 2015. After the three recently launched hotels, the total number of hotels India by Accor touched 25 across six brands.

Jean-Michel Casse', senior vice president, operations Accor India believes that growth will come from the mid-segment and economy range of offerings from the group. “We have six brands in India, but majority of our expansion has happened in our Novotel and ibis brands. Both brands have an amazing acceptance in the Indian market. Novotel, since its launch in 2006 has been able to create a brand for itself. Both these brands have met the expectation in terms of price points and services offered,” he added.  Accor has been able to expand its presence well in India since it first launched its hotel in 2006. In the last eight years the company has opened up 25 hotels. Industry experts agree that Accor has been much more aggressive in opening hotels in India than any other player. “Majority of these investments are through our various investment vehicles so that we are in control, in terms of developing the property and construction process. Other than the JV with InterGlobe for ibis we have also created a fund with InterGlobe along with Singapore-based fund Pacifica, from which investments are being made in India,” said Casse’. Accor has so far invested over $200 million in India.

Going ahead the company also added that they would prefer to grow through management agreements rather than invest into creating stand-alone properties. “Our investments in India were made to build strategic anchors for us. Today they have borne fruit. We have some sort of equity holding in upto 50 per cent of the projects here. Going forward we will continue to invest in property, especially for our budget and economy brands—ibis and Formule1—other than that it will be more strategic in nature. Henceforth we would like to grow through management agreements. We will be selectively look for franchise opportunity for select brands,” said Lokesh Sabharwal, VP, development, India, Nepal, Bangladesh & Sri Lanka

Accor, said Casse’, has also been successful in India due to India specific changes that the company introduced as it grew here. When Casse’ arrived in India six years back he wanted to bring in some adaptation to the ibis brand so that it can be successful in India. “It was not easy to convince the board to change our standard of ibis. One brand that is known for its standardization across the world is McDonalds, and even they had made changes for India. Like home delivery, this is not common across the globe, or even service to the table. If McDonald had to do it then we too had to bring some changes,” added he.

So unlike ibis in other geographies, the brand in India provides breakfast which is one of the longest. Starts early and is available till 12.00pm. It also provides for room service among other services.