
To mark the official opening of the Sofitel and Novotel Mumbai Bangalore, Denis Hennequin reiterated the importance of the Indian market in Accor's strategy, which aims to place Western groups in this market, currently under-equipped. Michael Issenberg and his teams are reaping the benefits after a long working partnership with local groups who have been struggling to get under way.
Indeed, it took nearly six years after the groundbreaking to cut the ribbon at the Sofitel Mumbai, but the Accor strategy has been launched, which is to regularly multiply its presence in every segment of the hotel industry in this country that has fewer rooms than the Greater Paris Region (120,000 official rooms that meet international standards for a country of 1.2 billion people, of which 300 to 400 million have middle-class revenues). During his special trip to India, Denis Hennequin has inaugurated both the Sofitel and Novotel Mumbai in Bangalore, two booming cities. The opportunity recalls the group's desire to establish itself as the leading Western hotel, as it already is for the entire Asia-Pacific and some major countries such as Australia, Indonesia or Thailand. "There is not enough of a supply, so there is market share to take," said Denis Hennequin, CEO of the group, demonstrating motivation to accelerate the development of Accor in India. The group’s ambitions cover the three major niches in the hotel industry: the luxury Sofitel and Pullman (12 hotels by 2015), the midrange with Novotel (a total 33 hotels to come) and with the economic Ibis and Formule 1 (45 hotels in 2015), a total of 20,000 rooms once completed. To date, the Accor network already has 15 hotels open for some 2,700 rooms and has a pipeline of 58 hotels already signed or 11 650 additional rooms. They are very close to achieving their stated objective.In this unique country where formalities are particularly complex and tedious, the partnership with a local player has emerged as a common-sense solution. Accor chose joint ventures with Pacifica Partners (composed of by the Singaporean GIC and Host) and InterGloble. Using its own funds, Accor will also develop the Formula 1 brand (The Asian version of Etap Hotel, or Ibis Budget, is set to happen when contracts are reviewed). As a supporter of asset right, Accor will establish its brands faster and secure deals with partners in joint ventures. Accor has already committed $ 223 million on projects and a part of the pipeline. It will have to invest even more as new projects progress, but also to build up a property portfolio that will take a potential value. The value of assets already in operation is estimated at over one billion dollars.A virtual Accor academy is already operational with 15 trainers who travel to schools to provide the necessary training to local staff. The skilled workforce is a critical issue at a time when all international groups are multiply projects overseas. The average turnover of a hotel in India is approaching 50% and any decrease in this figure brought through training and career prospects is a victory in the field of Human Resources.It must be said that the market seems quite promising, even if it is objectively more difficult to approach than other Asian markets. The Indian economy is growing steadily and the number of domestic trips are exploding through the development of low-cost connections. The need for standardized hospitality is particularly obvious in the new cities that are benefiting from India's boom: nearly 70 cities already exceed a million inhabitants. Even if the market is more tense in the upscale segment, midscale and economic niches are very promising.Competitor Rezidor-Carlon is also on the same path, with a recent announcement from the lips of Hubert Joly himself, present in India: Development of fifty Park Inn by Radisson in 2014 with a local partner, Bestech.Accor’s local competition is still small. Only two groups, Fortune Hotels and Lemon Tree Hotels, have aspirations on the national midscale market, and the economic subsidiary group Taj Ginger Hotel, is interested with two stars, though it is encountering difficulties. The race is already under way between Western groups who have mastered these concepts. The announced upcoming openings will also place the Pullman brand in Gurgaon and strengthen Novotel in Pune, Mumbai Andheri, Ibis in Bangalore Hosur and Mumbai airport.
