Major franchise deal to accelerate Accor’s Chinese growth

All ibis hotels in China will now be operated by Huazhu, under a master franchise agreement
All ibis hotels in China will now be operated by Huazhu, under a master franchise agreement

Accor has signed a new alliance with one of China’s largest hotel operators, as it accelerates its expansion plans in the world’s most populous country.

The European hotel group has penned a master franchise agreement with Huazhu Hotel Group, which will see the Chinese firm take control of all ibis, ibis Styles, Mercure, Novotel and Grand Mercure hotels in mainland China, Taiwan and Mongolia. The deal also includes plans to develop up to 400 new Accor-branded hotels in China the mid-term.

“This ground-breaking collaboration will leverage the strengths of Accor’s global brands with a leading player in Chinese hospitality,” said Sebastien Bazin, chairman & CEO of Accor. “Joining Huazhu’s unparalleled local expertise with our brands will create a hospitality powerhouse which will deliver unprecedented value to both groups and to our customers.”

Though little known outside China, Huazhu – which is also known as the China Lodging Group –currently has a portfolio of more than 1,900 hotels, making it the 13th largest hotel group in the world. It operates a range of brands, from the upscale Joya and Manxin to the midscale JI Hotels and Starway, and the economy Hanting, Elan and Hi Inn.

Following the deal, Accor’s economy and midscale brands in China will become part of Huazhu under a franchise agreement, although they will continue to be operated under their current brands.

Accor will continue to manage its Sofitel, Pullman, MGallery and Sebel brands, but Huazhu will become a 10% shareholder in Accor’s luxury and upscale business in China, supporting future developments through its Chinese real estate contacts. Reciprocally, Accor will take a 10% stake in Huazhu.

The agreement will also accelerate the development of Accor’s portfolio in China. Huazhu now plans to open 350-400 new hotels under the Accor budget and midscale brands in the next five years.

“With an extensive brand portfolio, and strong distribution and loyalty platforms, Accor and Huazhu share a lot of common values. By combining forces we can facilitate growth and attract more customers to the expanded network,” said Ji Qi, Huazhu’s founder, chairman & CEO.

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