Accor, InterGlobe India venture moves forward

Update: On August 27, Accor named Ranju Alex as its CEO for South Asia (covering India, Bangladesh, Pakistan, and Sri Lanka).

Accor is a leading hospitality player and operates over 70 hotels in the region with over 30 hotels in the pipeline. 

INTERNATIONAL REPORT – Nearly five months since announcing a recalibrated partnership in India, Accor and InterGlobe Enterprises are still without a CEO leading the new company, which remains nameless, and have yet to obtain the regulatory approvals to merge their earlier joint ventures into a single entity.

But what appears as a dawdling start belies the headway that is happening inside. According to chairman of the new company, Gaurav Bhushan, much progress has been made in building its organizational structure, leadership and team, details of which will be announced soon.

Hotel Investment Today understands a top contender for the CEO position is an Indian senior executive from Marriott International who has years of experience in India. Marriott has 150 open hotels in India, twice that of Accor, and has just signed six hotels with 1,000 rooms with Brigade Hotel Ventures, including a Ritz-Carlton in Kerala.

The new India domicile company will have an autonomous team led by a single CEO reporting to its board and will be “completely localized,” said Bhushan, who takes up the chairman mantle on top of his role at Accor as co-CEO of Ennismore.

“Significant” investment will be made on three areas: people, brands and technology, typical of an asset-light company, he said. Development infrastructure will be “substantially enhanced,” given the new target of 300 hotels in India by 2030.

Rahul Bhatia (l.), InterGlobe Enterprises, signed a deal in April with Accor Chairman and CEO Sébastien Bazin.

“It’s about strenghtening the size of our development team. It’s about making our distribution and loyalty [program] stronger, and it’s about putting more brands in place in India,” Bhushan said.

When asked if a doubling of resources is on the cards perhaps, he said, “We’ve announced that we want to go from 71 hotels in India to 300 hotels [by 2030], and we will invest in the resources and whatever it takes to deliver the target.” The existing joint venture operating company in India has around 50 people overseeing the operations of the portfolio.

InterGlobe Enterprises appears to have greater control in the earlier JVs with Accor through a bigger equity position. While Bhushan would not reveal the new equity composition, he emphasized, “It’s a joint venture with joint control. We’ll have a name with both Accor and InterGlobe in it.”

And why is there no CEO appointment yet? “We’ve been at it, but finding the right leader is not an easy task,” he said.

Red tape in India is likely a factor in obtaining regulatory approvals. However, Bhushan said this does not mean it will derail the growth target. “The existing companies will continue with their own paths and operate independently until we can put everything together into the new entity once we receive all the necessary approvals. So, we are already growing through the existing operating company, and the vast majority of growth is through asset-light development,” he said.

All signings – past, present and future – will be consolidated into the unified company, save for ibis and Mercure, whose growth will be driven by Treebo, following InterGlobe and Accor’s investment in Treebo.

Luxury, lifestyle traction

Before, Accor was mainly developing midscale and economy brands in India, but the chain is now pushing the pedal on luxury and lifestyle development.

The India market is mature; the price points are at a level where it makes financial sense to develop luxury and lifestyle hotels in a more meaningful way. The evolution of the Indian economy, hospitality market and the Indian customer is probably the most important milestone in our strategy to double down on India.

Gaurav Bhushan

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“We’re putting new brands in the market with a much bigger team in place,” Bhushan said. “Currently we’re operating nine brands in India, but we will more than double this number in the next 24 months. So, the combination of brands and the enhanced team is what will drive growth.”

He added that there’s huge interest in Ennismore brands such as Mama Shelter, Hoxton and Delano, and luxury brands such as Fairmont and Raffles. “There’s a lot of buzz and excitement around bringing new products into the market,” Bhushan said.

Bhushan declined to comment on why Accor is considering listing Ennismore in the U.S. Speculation is also rife about another reorganization at Accor, including a possible merger of Raffles and Fairmont into Sofitel Legend, Sofitel, MGallery & Emblems, a platform led by its CEO Maud Bailey.

The first Ennismore hotel in India is set to open in Mumbai this December. Interestingly, the property will be a Morgan Originals, reflecting that India investors aren’t afraid of experimenting or pioneering new brands. There are only three open Morgan Originals hotels, two in London and one in Miami.

Fairmont and Raffles are gaining traction. Fairmont Jaipur debuted in 2012; the second Fairmont, in Mumbai opened last April – a gap of 13 years. But now, Fairmont Udaipur Palace soft-opened last July, to be followed by Fairmonts in Agra, Shimla Fagu and Goa Shiroda.

Likewise, a third Raffles in Ranthambore will open by mid-2027, after Raffles Jaipur (2024) and Raffles Udaipur (2021). Raffles Goa is scheduled to open in 2030.

“Life is a lot about timing. Five or seven years ago, it was perhaps a bit early to focus on a scalable luxury and lifestyle strategy,” Bhushan said. “But now, the India market is mature; the price points are at a level where it makes financial sense to develop luxury and lifestyle hotels in a more meaningful way. The evolution of the Indian economy, hospitality market and the Indian customer is probably the most important milestone in our strategy to double down on India.”

Meanwhile, progress has also been made on Accor’s partnership with InterGlobe's IndiGO. “We’re on track to launch our loyalty points exchange in Q4 of this year and enhancing our co-operation through cross marketing and other strategic initiatives,” Bhushan continued. “This will have a strong impact on our business, not just in India but in the Middle East and Southeast Asia, given the strong outbound India market to these two regions.”

So, how much time does Bhushan spend on India? “We already have a good team on the ground, so I’ve been streamlining the organization, finding new talent, and so on. Quite a lot of time, but it’s also going to be a great platform for Ennismore to grow its brands in India. What is good for Accor in India is also good for Ennismore in India.”