AccorHotels adapts new growth strategy

By Lin Wenjie | China Daily | Updated: 2017-10-28 06:58

With an explosive number of high-end hotels opening in China, the country's luxury hospitality market is approaching saturation, increasing the competition between famous brands.

Despite this, Accor executives forecast that medium-priced and upscale hotel chains will continue to grow rapidly during the next few years due to the growth of the middle income group.

AccorHotels, the sixth-largest hotel group in the world by number of rooms, is adapting its strategy to satisfy the demands of its customers.

"Based on the new economy of China, which is transforming from an export-led economy to a consumer-led economy, we'll see more demand for midscale and upscale hotels in the next decade," said Michel Molliet, chief operating officer of Greater China at AccorHotels.

To accelerate the development of its midscale and upscale hotels and strengthen awareness of the Accor brand in the country, AccorHotels has signed a strategic alliance with Huazhu Hotels Group, which owns and operates more than 3,000 lodgings across China including HanTing Hotel.

There are 50 to 60 hotels under the Grand Mercure, Novotel, Mercure and ibis brand names scheduled to open in China this year as part of the partnership with Huazhu.

An additional 90 hotels are under development for other Accor brands. Moreover, there are more than 200 new hotels being discussed.

An increasing number of boutique and lifestyle hotels will also emerge in the next few years to meet the demand of millennials, Molliet said.

"The new generation is growing up. They want to have something different from traditional hotels, so the boutique hotels with fashion designs will satisfy their need.

"But it's too early to say if that is a trend coming."

With hundreds of hotels planned for rollout in China, Michael Issenberg, chairman and chief executive of AccorHotels Asia-Pacific, noted that the country is the most important market for the Accor group currently and is the driving force behind the current growth in tourism across the Asia-Pacific region.

"Asia-Pacific currently makes up 27 percent of AccorHotels' global network, and 48 percent of the pipeline, so this region is definitely leading the way forward for the group," Issenberg said. "China is now the most important outbound market in the world."

Molliet said the competition is fierce since all the international brands are aggressively opening new hotels in China, but instead of focusing on offering a better price, Accor is primarily attempting to impress with a high level of professionalism.

Another part of the expansion strategy for Accor is its aggressive merger and acquisition plan. With almost one new acquisition or merger announced each month since 2016, the group is focused on improving and complementing its services.

Over the past two years, the group has acquired brands such as Raf es, Fairmont and Swissotel, and entered into new strategic partnerships with Rixos and Banyan Tress.

cherrylin@chinadailyhk.com