NEW DELHI : French hospitality major Accor Hotels plans to add 17 hotels in India across its luxury, premium, midscale and economy segments over the next few years.

After the launch of its luxury property Raffles in Udaipur, in August, the French hotel operator is set to launch another Raffles property in Jaipur by the end of 2022. It will also open a 600-room Fairmont hotel in Mumbai and five more Novotel hotels across the country. Novotel is the company’s midscale brand.

Accor is also developing the Ibis properties in partnership with InterGlobe Hotels. It opened an Ibis Hotel in Vikhroli in suburban Mumbai on 15 October. The property cost the hotel operator’s partner ₹225 crore to build, including the price of the land, said J.B. Singh, president and chief executive officer (CEO) of InterGlobe. This is the 20th Ibis hotel in India.

InterGlobe, which has committed ₹3,200 crore towards a venture with Accor to develop Ibis and Novotel hotels in India, will invest an additional ₹1,100 crore, including the spending towards the Vikhroli property, to develop five more hotels. These properties are expected to open in Bengaluru, Maharashtra and Goa. Bengaluru will have one Novotel and Ibis property each, and the remaining three Ibis hotels will be in Maharashtra (Kalina and Thane) and Goa.

“India is a massive market. And it is severely under-penetrated in terms of hotel rooms. There are only about 150,000 branded hotel rooms in the country—as many as there are in Bangkok or Dubai each," said Singh.

The firm, he adds, will continue to build hotels despite the covid setback in key cities and not just the big metros.

Puneet Dhawan, senior vice president, operations at Accor India and South Asia, said leisure destinations or luxury hotels did relatively better during the pandemic as corporate travel declined. But the company had to market itself to segments of travellers whom it had never targeted earlier. For instance, it launched the ‘Work@ibis’ co-working space and became pet-friendly at some of its otherwise business-traveller-dominated hotels.

“We have had to evolve our brands to suit the needs of the young Indian customer. We even added features like the ability to watch OTT platforms on our TVs," said Dhawan.

But average daily rates—indicators of hotels’ overall performance and profit—are still lagging in most cities. A similar situation occurred after the last major financial crisis of 2008 when the rates took 7-8 years to stabilize, also delayed by increased hotel room inventory in major metros.

“But this time, we are going to be seeing a faster recovery. The volume of business is already back in some cities, and some destinations like Goa and Chandigarh are seeing even higher average daily rates," added Dhawan.

According to a report by Gurugram-based hospitality consultancy firm Hotelivate, supply of branded rooms in India grew by 3.3% in 2020-21, increasing the total tally to 144,000. This includes the 4,093 new rooms opened during the year.

The ‘Trends and Opportunities’ report by Hotelivate said Accor is the fourth-largest branded hotel room company in India behind Marriott, The Indian Hotels Co. Ltd and Radisson.

“By 2025-26, we anticipate an addition of about 36,599 branded rooms (under active development), taking the total supply to 180,000 rooms," said Achin Khanna, managing partner, strategic advisory at Hotelivate.

Among the proposed hotel inventory, the upscale segment continues to remain the most popular. This is closely followed by the upper mid-market and the mid-market segments. Together, these three segments contribute almost 75% of the new supply expected to enter the market over the next five years.