Accor has reached an alliance agreement with Chinese lodging company Huazhu Hotels Group that will accelerate development of Accor's brands in China and tie together the two companies' distribution and loyalty strategies.
The agreement, for which government approval is pending, integrates Accor's economy and midprice hotels in China—which include Novotel, Mercure and the Ibis brand family—as part of Huazhu, also known as China Lodging Group. Huazhu also will become the exclusive franchisee to develop and operate those brands for Accor in mainland China, Taiwan and Mongolia.
Accor still will lead development and operations of its upscale hotels, excluding Grand Mercure, and luxury brands in the region, which include Sofitel, Pullman, MGallery and the Sebel. Huazhu will get a 10 percent stake in that business to spur development of those brands. Accor also is taking a 10 percent stake in Huazhu.
With that alliance, Huazhu plans to open up to 400 new hotels under Accor brands in the next five years, according to the companies. Accor currently has 144 hotels in China.
Huazhu, which operates 1,849 hotels with almost 200,000 rooms, has its own portfolio of brands ranging from economy to upscale, including Joya Hotel, Manxin Hotels & Resorts, Ji Hotel, Starway Hotel, HanTing Hotel, Elan Hotel and Hi Inn. All of Accor's hotels in China, however, will keep their "identities, specificities and international standards," according to Accor.
Additionally, the agreement "will link the power of both groups' reservation and loyalty platforms, providing an expanded distribution capability," Accor chairman and CEO Sebastien Bazin said in a statement.