Keynote Address

'We want to focus on the mid-scale, economy segments'

Gilles Pelisson, director and CEO, Accor

Excerpts

We at Accor believe there is a great future in India because of the booming domestic tourist market. Year 2007 has been an exciting year for Accor as we posted revenues of US$ 12 billion. Today, we have approximately 4,000 hotels in 89 countries, with 4,60,000 rooms. We pride ourselves in being the worldwide leader in the economy and the mid-scale segment on five continents.

Over the last three years we have redesigned our brand portfolio by repositioning Sofitel as a true five-star luxury brand. With this brand we will bring a more European and French experience to India, which has a lot of American players in the marketplace. We are also bringing our brand Pullman Hotels to India; they are large meeting and convention hotels. In the mid-scale segment we have the Novotel and the Mercure brands.

Our economy brand Ibis is present in 37 countries in five continents. The All Seasons brand is a non-standardised economy hotel which unlike Ibis works primarily on the franchise model. In the budget segment, we have Formule 1 brand and Motel 6.

We don't follow an asset-light strategy, but an asset-right strategy. Depending on the country and size of the segment, we will invest, especially in the economy and mid-scale, mostly in emerging countries where we don't have an asset base. At an investment of US$ 30 billion of our own and our partners' investments, we will develop 2,00,000 rooms between 2006-2010.

Looking at the Asia Pacific market as a land of opportunity, we have 340 hotels in that part of the world. We are looking at China and India very actively. In India we want to be an operator with a focus on the mid-scale and the economy segment. Currently we are contemplating having 30 properties by 2010, which should go up to 60 properties by 2012, with presence across five brands - Novotel, Sofitel, Mercure, Ibis and Formule 1 and we hope to bring in the sixth brand, Pullman too.

We are opening five properties this year - an Ibis each in Gurgaon, New Delhi and Pune, and another Novotel at the new Hyderabad Airport. We will convert an existing property in Mumbai into a Novotel. In Bangalore, we will have our first hotel, a Mercure. We have a commitment to invest in India and our strategy is partnerships. Our first partnership is a joint venture with Interglobe to develop an Ibis network - and aim to have 12 Ibis hotels by 2010 and 20 by 2012. We are looking at major and secondary cities in India - Bangalore, Mumbai, Delhi, Chandigarh, Indore and Nagpur to address the domestic market. This entry-level product will be priced at US$ 80. Our second partnership in India is with Emaar-MGF to develop 50 Formule 1 hotels. We already have six committed sites for Formule 1, which will be priced between US$ 40-50.

In total, at least US$ 225 million are earmarked for India. So far we have invested 75 million dollars till date. We are very happy with the infrastructure development across regions in this country. Today, the Indian consumer is well travelled and well-versed with the internet and he wants to utilise recognised brands. Ultimately, we are looking at India to build a network and tap the domestic travel segment.