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Sebastien Bazin, Group Chairman and CEO at Accor, expects India's hospitality sector to grow at double-digit rates over the next 10 years, driven by rising domestic and international travel and improved infrastructure. Accor has expanded its long-standing partnership with InterGlobe Enterprises to accelerate that growth. The two have announced a unified hospitality business and launched a common loyalty programme for IndiGo’s BluChip members and Accor’s Live Limitless customers.
Rahul Bhatia, MD of InterGlobe Enterprises, echoed this confidence, saying, “Our commitment with Accor is not about short-term gains. The long-term growth in India is clear.” InterGlobe Enterprises has announced a common loyalty program between Indigo BluChip and Accor Live Limitless members.
InterGlobe group has partnered with Accor to create a fast growing hospitality enterprise. Currently, they operate around 70 hotels with another 40 in the pipeline. Now, they plan to triple their footprint and reach 300 properties in under five years.
“It took us 18 years to reach 100 properties. Now, we are promising to go five times faster — opening 25 to 35 hotels each year,” said Bazin. These are the edited excerpts of the interview.
Q: How is the hospitality industry managing demand amidst the trade uncertainties around the world? Bazin: There is certainly no uncertainty when it comes to India, I can tell you, and I am probably going to be right, for the next 20 years, you are going to have a fast growing travel, hospitality market being developed in India only because you are 30 years late, and you finally got today the infrastructure, the financial industry, the telecom industry, the travel industry actually, who being built up for the last 10 years, and it's just time now to scale it, to go faster. But you have to do it in a local way, unified forces, but I can guarantee you it is going to be probably, maybe a double-digit growth demand for the next 10 years to go domestically and internationally for Indian travelling abroad. Q: Do you concur that the Indian hospitality, travel, and hotel industry is fairly resilient to any sort of global shocks? Bhatia: In many ways, InterGlobe demonstrates that it's long on India, and we are certainly very long on Accor.
To your earlier point, this arrangement has got nothing to do with what may happen in the short term, in the long term, the growth in India is only going to go one way. Q: Let us talk about this arrangement itself. You have been partners for the last 20 years now with this formalised commitment, if you could give us a sense of what is the goal here, what is the investment that you are planning to make, and does it have anything to do with the listed Indigo player when it comes to you investing in a business like this? Bhatia: We had several moving parts in our relationship over the years.
We had a development company, we had a management company, we had a separate investment in a portfolio alongside GIC, and all of that is getting consolidated under one unified business. In so far as Indigo is concerned, Indigo has nothing to do with this arrangement. This is purely something between InterGlobe and Accor Q: The funding for this, what are the kind of investments that you have earmarked? Bazin: We have put hundreds of million over the last 15 years together.
There is so many interests from so many real estate developers locally in India who really want to take advantage of the brand, the distribution and the demand that gets by putting all the operational technology together, the management, the leadership, the development, the governance don't you worry, there's a lot of interested party who wants, basically, to take the benefit of what we are putting together. They will invest each of them separately, different brand experience, all the money needed and if needs be, there is probably going to be few occasions where we are going to be decided to do it ourselves. But it's really a question of multiplying the growth that we began during the last 15 years five times faster.
We could only do this if we simplify ourselves in terms of government and leadership, and that's what we are being announcing today. Q: Tell us a little about the announcement with Treebo as well. You guys have made an investment in Treebo to be their largest shareholder together you all will be growing.
Give us a sense of that? Bazin: Treebo has been actually created by Sidharth Gupta and two of his co-founders. It is today recognised as the best, fastest travel tech, technology software existing. He has been connecting within almost like five hours one hotel.
Then he is growing today with 850 hotels under his tutorship. We have been watching them for the last five years. We have been investing five years ago, and now we realised they are the best equipped to do customer reservation system and property management system together.
They are good, they are fast, they are young, they are advanced in technology. It's super important for both of us to connect Treebo technology to our own, basically governance and development, and we also trusting Treebo to go faster on two brands, where we are going to have a master franchise for Ibis and Mercure, so it's going to match your dual track master franchise for two brands and technology provider for CRS. Q: Could you give us some numbers? Then you have about 70 properties in India as of now under this partnership.
What is it that you are targeting in the very near term, the medium and long term? Bazin: It took us 18 years to go to 100 properties, 70 up and 40 to be open. That's great, but that's not good enough. We have promised the market we are going to go as of today, five times faster, because we aim to have 300 properties in less than five years from today.
We are going to go from five or six opening a year to probably to 25 to 35 opening per year. We know what we actually are undertaking, and I hope it's going to be better in the years to come. Q: What are the synergies that you see between the InterGlobe group and the Accor group? If you could give us a sense on how you all would allow them to grow at five times the pace, or enable them to grow at five times the pace that they have been growing so far? Bhatia: Operationally, Accor is a world class operation.
They understand how to operate and manage hotels. We think we understand India and what it takes to do business in the country, and that complementarity will go a long way between the two of us. The other thing that you have to also take into account is the relationship between the two companies is time tested.
We have been together for just over 20 years, and nothing can stand the test of time, if it was not built on respect to each other, common shared vision and what we believe we can do going forward. So that's the bedrock of the future, and we are terribly excited about it. Q: You are a rare voice, and we speak through you for the industry as well, and this be the hospitality industry as well as the aviation industry.
From where you see things as right now, there is a fair amount of promise, but there are a lot of challenges as well. Where do you think are the challenges, and what are you doing to overcome them in both aviation and hospitality? Bhatia: My simple view on this is, the greater the complexity, greater is the opportunity and if you can navigate through that complexity and essentially create a moat for yourself, it will see you through for a very long period of time. We believe that in the hospitality space, what we are embarking on a renewed vow between the Accor and InterGlobe, I think by 2030 we would have actually created a moat.
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