Accor and Huazhu Hotels Group (China Lodging Group) have pledged towards a long-term alliance to create a strong and diversified hotel company in China with over 2,000 hotels in the country. This alliance will facilitate both groups in the expansion of one of today's fast-growing and largest domestic travel markets in China.
The objective of the alliance is to bring together the best of the two respective groups, combining Accor’s internationally recognized brands and powerful global distribution network with the extensive coverage, local reputation and strong development capability of Huazhu Hotels Group in China.
Together the groups have more than 500 hotels in the pipeline in the region and the alliance is expected to further accelerate development to new levels and see faster expansion of Accor’s brands in China.
Huazhu is a leading and fast-growing hotel group in China, with a portfolio of over 1,900 hotels. It is the 13th largest hotel group globally in 2013 the market from Upscale (Joya, Manxin) to midscale (JI Hotels, Starway) and Economy (Hanting, Elan and Hi Inn), making the group a perfect match with Accor. Huazhu has the strongest pipeline of any hotel group in China to fuel future growth.
Accor currently has 144 hotels in China across eight brands including Luxury/Upscale (Sofitel, Pullman, MGallery, Grand Mercure); Midscale (Novotel, Mercure) and Economy (ibis, ibis Styles).
The group has been present in China for more than three decades and is the leading hotel group in Europe, Latin America, Africa and the Middle-East, as well as Australasia. Pursuant to the transaction, Accor’s economy and midscale platform in China will become part of Huazhu. Under the arrangement, Huazhu will become Accor’s exclusive master-franchisee operating and developing in Mainland China, Mongolia and Taiwan for the economy (ibis, ibis Styles,) and midscale segments (Novotel and Mercure), as well as the upscale Grand Mercure brand.
Accor will continue to lead the ownership and development of all its Luxury and other Upscale brands in China, including Sofitel, Pullman, MGallery and The Sebel. Huazhu will become a minority shareholder in Accor’s Luxury and Upscale business in China (10%) and will help support future development in the country, thanks to its in-depth relationships with key Chinese real estate investors.
All Accor’s existing hotels in China will continue to be operated under their current international brand standards, benefiting from current global distribution and loyalty platforms, together with the added support of Huazhu’s networks and domestic reputation. They will maintain their identities, specificity and international standards, while benefiting from Huazhu’s extensive on-the-ground support capabilities and local expertise.
Under the arrangement, Accor will take a 10% stake in Huazhu and will have a seat at Huazhu’s board of directors. This strategic alliance aims at accelerating expansion by leveraging Huazhu’s strength in development, real estate investor relations and experience in operating a sizable hotel network in China. Huazhu plans to open 350 to 400 new hotels under the Accor brands in the next five years.
The agreement will offer the customers of both loyalty programs (together 47 million card holders) the opportunity to access a network of over 5,600 hotels globally.