Accor, which operates 550 hotels in the Asia-Pacific region, gets 14% of its revenues from the region, and wants to take this up to 25% by 2020.
Jean-Michel Casse, the company's senior vice-president, operations India, talks of the growth plans in India in an interaction with Shweta Bhanot.
Accor has looked into acquisitions in many markets to expand quickly. Would that strategy be applied in India as well to grow faster?
We have 20 hotels today in India and around 48 more are under various stages of development. If there is any opportunity in the market at the right price, we may look at acquisition for faster growth in the market. However, as of now, we do not see any opportunity in the market. Accor would be adding 10 hotels on an average every year in India till 2015, and have 50 hotels operational in the market by then.
Unlike other global brands who are shy of investing in India, Accor has been upbeat on infusing equity. What makes Accor invest in India and beat the trend?
We were late entrants into India. The brand had made a few attempts since 1991 through various management contracts and partners, but had to exit. It was in 2004-05 that we found the right partner in Interglobe and formed a joint venture for exclusively the Ibis brand. Later, we opened a fund wherein Accor, Interglobe and Pacifica Partners hold a third each, to look into Pullman and Novotel brands. We realised that if we need to grow quickly, we need to bring in equity. Our priority has been an asset light model and to have diversified partners.
How much equity has Accor invested in India so far?
We have brought in $200-250 million in India so far. This already covers hotels under various stages of development. For now, we do not plan to get any more equity unless there is an opportunity of acquisition or new hotels planned with Interglobe.
Which brands would register maximum addition every year?
Our mainstream business is going to be from economy, mid-scale and upscale brands. We would not look at huge development in the luxury segment in India. Our brands like Ibis, Formule 1 and Novotel are the ones that would see maximum addition every year. Our luxury brand Sofitel is not expected to contribute much to our business in India.