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  1. Accor bets big on low-cost budget hotel model in India

Accor bets big on low-cost budget hotel model in India

To counter the challenges posed by start-ups such as AirBnB and OYO Rooms, which offer budget hotel accommodation to cost conscious travellers, Accor, one of the biggest hotel operators, is expanding its low-cost budget hotel chain, Formule1, in the country.

By: | Updated: November 26, 2015 1:46 AM

To counter the challenges posed by start-ups such as AirBnB and OYO Rooms, which offer budget hotel accommodation to cost conscious travellers, Accor, one of the biggest hotel operators, is expanding its low-cost budget hotel chain, Formule1, in the country. “Its a brand, sized for Indians only…to suit the Indian palate,” Jean-Michel Casse senior vice president for India operations told FE in an interview. “The chain is designed for the young and technology-savvy travellers in India.”

Accor launched the Formule1 brand in June 1985 as a budget-hotel accommodation. The chain provides standardised rooms, equivalent to a star hotel, to business and leisure travellers, at economical prices. India is a recent addition after UK and Belgium. The chain is currently operational in Gurgaon, Ahmedabad, Bengaluru, two properties in Pune and Greater Noida and Hyderabad, with a total of 1036 rooms. The company plans to launch nine more hotels adding another 1122 rooms in the next two years, Casse said.

The move to focus on low-cost budget augurs well for AccorHotels, as India has seen a surge in domestic travellers, who are on the look-out for accommodation in the budget to mid-market segment. In 2014, about 1290 million people travelled within the country to various states compared to 22.57 million travellers who came to India from abroad in 2014. That was higher than the domestic travellers in 2013, which stood at 1142 million, and 19.95 million foreign travellers, as per the tourism ministry.

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