International players have increasingly made their presence known in the Indian hospitality sector. Even as the global hospitality industry experiences a lethargic growth, and China, that huge Asian market, shows very grim promise of growth, India is becoming the go-to destination in Asia.

In fact, of all the growth in the hospitality space in India, international hotel chains in recent years have been playing such a significant role, that as much as half the growth in the industry can be attributed to them. According to a recent report by ICRA, international hotel chains will account for 47% of the Indian hospitality industry by 2020 and 50% by 2022. They are growing at a compounded annual growth rate (CAGR) of 9.6% against industry growth rate of 6%.

Among the big international players who are active in the Indian market are names such as Marriott InternationalAccor Hotels and Carlson Rezidor.

Born in France, Made in India

In fact, the French Accor Group has gone on to become one of the fastest growers in the hospitality space in the country. The group completes a decade’s operation in India this year and is one of the few international operators to have invested heavily in India. Asia has come to account for more than 50% of Accor’s global growth, with India becoming a key contributor to this.

Among its strategies, the key has been the multipronged approach of targeting various segments. This month the group announced a milestone of having reached its 45th hotel and resort in India.

Jean-Michel Cassé, Senior Vice-President, Operations, Accor India, reflected that the group's success indicates the brand's effective "Born in France and Made in India approach."

Understanding India

The group, in fact, does seem to have understood and navigated the Indian market with tact. Its current statistic of 8000 room inventory is spread insightfully across various segments ranging from luxury to budget brands. Among the names of the brands the Accor group has brought to India are Fairmont, Sofitel, Pullman, Swissôtel, Grand Mercure, Novotel, Mercure, ibis, ibis Styles and Formule1.

While its luxury brands have been doing satisfactorily, what has spelt success for the Group has been its foray into the midscale segment. Exploiting the demand for midrange players is one of the strategies that paid back for French hotel giant. This year, the Novotel brand, a key player in this segment celebrated a decade's presence in India. While the Group also brought Ibis style, a highly popular economy brand into the Indian leisure market this year adding 28 hotels under these two brands.

Another strategy used by Accor to make its way through India, has been to spread out and look for opportunities outside of the big Indian cities. Today, the Group has a presence in 18 different cities. While tier 1 and tier 2 cities have been on its radar, Accor is keen to add tier 3 cities as well as leisure destinations to its portfolio.

Among properties opened this year are Ibis Chennai City Centre in Chennai, Mercure Hyderabad, Grand Mercure in Mysuru, The Bheemili Resort managed by Accor Hotels, Ibis in Hyderabad, Ibis Styles in Goa, Hotel Formule1 in Nashik and Hotel Formule1 in Chennai. The acquisition of FRHI added two brands to the Group– Fairmont Jaipur and Swissôtel Kolkata.

 Looking Ahead

As the New Year approaches, the company seems to have set its eyes on more growth and aims to add ten more hotels to its fold. By 2020, its goal is to be 10,000-room strong, with as many as 80 hotels.

"In 2016, we emerged as the largest hotel operator in major cities such as Hyderabad and Goa. We will continue to increase our growth presence across major cities in 2017,” Jean-Michel Cassé told the Economic Times.

Photo- Novotel Hyderabad Airport

Elizabeth Raj | Blogger - Arsha Consulting

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