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Accor explores upscale hotel market in China after FRHI acquisition

08/01/2016| 9:56:17 AM| ChinaTravelNews 中文

AccorHotels has boosted its hotel portfolio in China to 195 following its acquisition of FRHI and its three upscale hotel brands, and plans to open four Sofitel hotels, four Pullman hotels, one Fairmont hotel and two Swissotels by the end of next year.

AccorHotels Group has completed its acquisition of Toronto-based hotel management company FRHI and FRHI’s three high-end hotel brands – Fairmont, Raffles and Swissotel.

Michel Molliet, chief operating officer of AccorHotels, Greater China, revealed in an interview on July 28 that the hotel group has 195 hotels in China after the acquisition, and plans to add 100 more hotels in China mainly in the luxury category.

Mr Molliet said: “The acquisition, a milestone in our history, will diversify our brands in the upscale hotel market. It has also expanded our presence in North America and improved our global reach. The value of the deal will become apparent through increased revenue, maximized profit margins, optimized marketing, sales and distribution channels as well as integration of operational expertise and talents.”

AccorHotels, Europe’s biggest hotel operator, has paid USD 840 million in cash and 46.7 million new shares for the deal to Qatar Investment Authority (QIA) and Prince Alwaleed Bin Talal’s Kingdom Holding Co. (KHC). The deal delivered QIA a 10.4% stake of AccorHotels and 5.8% for KHC.

After the acquisition, the world is watching how the two hotel groups integrate for future development.

Molliet said that there's quite obviously a lot of synergy between the two companies in driving common development, overall revenue, improving distribution channels and merchandising as FRHI has high-quality brands and iconic hotels; while Accor has more extensive reach and a large pool of loyal customers.

As Accor has pledged to invest €225 million in eight “digital innovation” programs since last year, the integration of FRHI and the strengthening of distribution network will benefit from it. “Digital application is our top priority and we have made our distribution network digital and optimized the usability of our App,” said Molliet.

“In China, in addition to our existing 200 hotels, Accor has signed another 100 hotels ranging from luxury to economic brands, ” Molliet said. “We plan to open four Sofitel hotels, four Pullman hotels, one Fairmont hotel and two Swissotel properties by the end of next year.”

At the moment, the high-end hotel market in China is fiercely contested. Good properties are difficult to find and overall occupancy rate has been sliding.

China Lodging Group (Huazhu), a leading and fast-growing multi-brand hotel group in China, announced last January that it had formed a strategic alliance with AccorHotels. After the deal, Accor has a 10% stake and one board seat in Huazhu and continues to spearhead its luxury brands including Sofitel, Pullman and Sebel in China and Huazhu has a 10% interests in these brands. (Translated by Claire)

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