Luxury Boom: Accor expands in India as rising prosperity fuels hotel demand

Mint

20-05-2025

Accor is expanding its footprint in India, positioning itself to capitalize on a post-pandemic boom in the hospitality sector where domestic travellers are increasingly willing to splurge on high-end experiences.
'India's hospitality industry is at an inflection point. The market is changing and also continuing to grow post the pandemic and we want to be at the forefront of this opportunity," Gaurav Bhushan, global CEO of Accor's lifestyle and leisure brands and co-CEO of its Ennismore Hotels, who is visiting India this week, told Mint.
As the market is expanding, the French hospitality giant has also seen a sharp acceleration in its luxury portfolio, with primarily domestic travellers now driving demand. 'When we first began to develop our top luxury brands in India, such as Fairmont and Raffles, 7-8 years ago, we expected at least half of the demand to come from international travellers.
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Today, however, that has shifted dramatically with 80 to 90% of the demand now coming from domestic travellers. That tells you how the market is growing. Indians are willing to pay for top quality luxury hotels," Bhushan said.
"Today the domestic demand lies everywhere - from economy to ultra-luxury travel, and travellers are looking for experiences," he added. Last month, it opened a 440-room Fairmont Hotel in Mumbai.
He said that the increase in hotel prices across the industry reflects the growing ability of the consumers to pay for higher-quality hotels. "There are so many boutique hotel concepts coming up in India and many of them are charging anything between ₹20,00-40,000 a night and travellers are willing to pay for these," added Bhushan. The company's revenue in the India market has been "consistently growing at double digits" for the past two years.
With around 40 brands in its global portfolio, he said Accor's intent is 'to become the most extensive global hospitality company in India" over the next decade or so. Today, the country is a top 5-6 market for the company globally and Bhushan said the country is likely to become a top-3 market around the world in the next decade.
In the next five years, by 2030, India's organised hotel industry is expected to grow from 200,000 branded hotel rooms to about 300,000.
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Accor, whose most popular brand in India is Novotel, is one of the few companies to have invested in the country's hotel market. Along with InterGlobe Aviation, it invested in creating an entity back in 2004, Interglobe Hotels which was designed to develop budget hotels under the Ibis brands.
This was a significant development as most international hotel management companies, with a few exceptions, that are present in the country generally only come in as operators of hotels and don't tend to invest money. 'India is now on top of the global priority for us. We have a tried and tested, incredibly great relationship with InterGlobe, now's the time to put it all together and put this on turbo charge. IndiGo, too, has changed substantially as an airline in the last two decades," Bhushan said.
The two have an investment split of 60:40 in real estate and 70:30 in operations, with a larger chunk of the investment coming from Accor. The other hotel company that has invested in India is Hyatt Hotels Corporation's owners into India's Juniper Hotels. Mint reported last month that Marriott International is also set to invest in domestic player Concept Hospitality.
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Newer brands coming in
In future, it will also bring its Ennismore lifestyle brands and restaurant concepts to India as part of this push. This is a global lifestyle hospitality company that Accor acquired in 2021.
'This brand and group of hotels also has restaurants and those concepts too will be brought here," he said. In the same complex as the Fairmont Mumbai, Accor also plans to open its Morgan Originals property with about 110 rooms, which comes under the Ennismore portfolio. Next, it will add brands like Mama Shelter and Hoxton, which are both lifestyle hotel brands from around the world.
As part of its expansion in the budget and mid-market space, Accor and InterGlobe are forming a new entity, which will be chaired by Bhushan, in partnership with Treebo. While the company itself will continue to focus on developing large-format hotels in primary tier I markets, Treebo will help scale smaller franchised hotels under Mercure and Ibis brands in tier 2 and 3 cities. 'We will focus on large assets in primary locations. While Treebo has the bandwidth and expertise to go for smaller hotels in tier 2, tier 3 markets. So, it's very complementary," Bhushan said.
Accor currently operates 72 hotels in India, including 30 with InterGlobe, with a total of 13,000 rooms. It has 40 more in the development pipeline. Ennismore, too, will be part of the new InterGlobe Accor venture. To be sure, all its brands in India will be managed by the joint venture.