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Accor shifts focus from luxury

By Ding Qingfen (China Daily)
Updated: 2009-04-13 07:48

Accor Hospitality (Accor), one of the world's leading hotel management groups, said it is revising its China strategy by focusing on mid- and low-end brands, including Pullman, Mercure and Ibis, in response to shrinking corporate traveling expenditures.

The global economic recession has "hurt China's hotel market including Accor's business, and the luxury sector has been possibly the most negatively affected," said Ray Stone, senior vice-president of sales & marketing Accor Asia-Pacific.

That is why Accor's China business will be now focus on mid-range and economy brands, he added.

The French company's fastest growing market is China and it has seven hotel brands and manages 76 hotel properties (22,101 rooms), ranging in level from luxury to budget, in the country.

Related readings:  Accor to expand presence in China  Accor plans new luxury, economy outlets  Accor to add 20 hotels in China  Accor expanding networks in China

Accor, like other hotel companies, had until recently been cashing on China's booming economy and expanding aggressively. The company added 23 new hotels last year and currently has 80 under construction.

But falling demand is stifling the company's business.

"This year will be much more difficult," said Robert Murray, senior vice-president of Accor China.

"Our upscale and mid-range brands, such as Pullman and Mercure, and our economy brand, Ibis, will be given more priority since they are outperforming the luxury and high-end brands," he added.

Accor is expected to have 180 hotels either in operation or under construction by 2011, two-third of them mid-range and economy, he said.

Accor launched its Pullman brand in January 2008 and now has five in China. It will add 15 by 2011. The company will also double the 24 Ibis hotels it has in China and add five to seven more Mercure hotels to the five it already has in the country.

There are no plans to build more of Accor's luxury brand Sofitel hotels in China, according to Murray.

Other hotel groups are also changing the focus of their Chinese operations to mid-range and economy brands; Jinjiang recently launched its second budget hotel brand, Bestay, and the InterContinental Hotel Group, said it plans to emphasize its mid-range brands such as Holiday Inn and Holiday Inn Express.