2014 Registration Document and Annual Financial Report - page 19

Strategic vision and outlook
Huazhu is a leading, fast-growing Chinese hospitality group that ranks
13th worldwide with a portfolio of more than 1,900 hotels. Its hotel
brands cover the full spectrum of the market from Upscale (Joya,
Manxin) to midscale (JI Hotels, Starway) and Economy (Hanting,
Elan and Hi Inn), making the group a perfect match with Accor.
Huazhu has the strongest pipeline of any hotel group in China to
fuel future growth. Accor currently has 144 hotels in China across
eight brands in the Luxury/Upscale (Sofitel, Pullman, MGallery,
Grand Mercure), Midscale (Novotel, Mercure) and Economy (ibis,
ibis Styles) segments. It has been present in China for more than
three decades and is the leading hotel group in Australasia.
Pursuant to the transaction, Accor’s Economy andMidscale operations
in China will become part of Huazhu under an exclusive Master
Franchise arrangement. It will then be in charge of operating and
developing the Economy (ibis and ibis Styles) and Midscale (Novotel
and Mercure) segments in China, Mongolia andTaiwan, as well as
the Upscale Grand Mercure brand.
Accor will continue to operate and develop all of its other Luxury
and Upscale brands in China – Sofitel, Pullman, MGallery and The
Sebel. Huazhu will take a 10% minority stake in Accor’s Luxury
and Upscale business in China and will help to accelerate future
development in the country, thanks to its close ties with key Chinese
business partners and investors. All of Accor’s existing hotels in
China will continue to be operated under their current international
brand standards, benefiting from the global distribution and loyalty
platforms already in place, together with the added support of
Huazhu’s networks and domestic reputation. They will maintain
their identities and unique features, while benefiting from Huazhu’s
extensive on-the-ground support capabilities and local expertise.
This strategic alliance aims to accelerate expansion by leveraging
Huazhu’s strength in development, real estate investor relations and
experience in operating a sizable hotel network in China. Huazhu
plans to open 350 to 400 new hotels under the Accor brands in the
next five years.The agreement will offer the 47 million cardholders
in the partners’ guest loyalty programs the opportunity to stay in
a combined network of more than 5,600 hotels around the world.
Under the arrangement, Accor will take a 10% stake in Huazhu and
have a seat on the company’s board of directors.
3. Return to fast development
of the hotel base, focused on markets
in the new economies
A total of 208 hotels, comprising 29,556 new rooms, were opened
worldwide in 2014, the equivalent of more than one hotel every
two days and one ibis every three days. Franchise agreements and
management contracts accounted for 91% of this development,
while leased hotels represented 6% and owned hotels 3%. Of the
openings, 71%were outside Europe, including 41% in theAsia-Pacific
region, 15% in Latin America and 15% in the Mediterranean/Africa/
Middle East region.
Accor’s development in 2014
Europe (excluding France and Mediterranean)
Asia Pacific
Mediterranean, Middle East, Africa
Registration Document 2014
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