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Hotel Chain Accor Enters Alliance with Huazhu Hotels Group

| Dec 26, 2014 04:52 AM EST

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French hotel group Accor is set to expand in China after signing an extensive alliance with Chinese hotel operator Huazhu Hotels Group Ltd.

Under the agreement, Accor will get a 10-percent stake in the Huazhu Hotels Group--which is also known as China Lodging Group--as well as a seat on the board. Accor will also retain management of all its luxury and upscale hotel brands, including Sofitel and Pullman, in China.

In turn, Huazhu is set to gain a 10-percent stake in Accor's luxury and upscale business in the country as well as control over Accor's ibis, ibis Styles, Mercure, Grand Mercure and Novotel in China under a master franchise.

The deal will give Accor's and Huazhu's 47 million active customers access to a network of over 5,600 hotels globally. Also included is the development of 350 to 400 new Accor-branded hotels.

China is currently one of the world's largest outbound travel markets and is among the fastest-growing markets in terms of domestic travel.

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

In a separate statement, Accor's CEO, Sebastien Bazin, also noted that the alliance will "leverage the strengths of Accor's global brands with a leading player in Chinese hospitality."

"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," Bazin added.

Accor currently operates 144 hotels in China, and has been present in the country for over three decades. It also has an extensive footprint in Europe, Latin America and the Middle East, and has recently opened new branches in Indonesia.

Huazhu, on the other hand, runs more than 1,900 hotels covering the entire Chinese market from upscale and midscale to economy.

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