French hotelier Accor to check out of Formule 1 hotels in India

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Global hospitality chain AccorHotels is divesting 40% shareholding in its Indian subsidiary Barque Hotels. A deal will see the French hotel company fully exit its investment in Barque, which currently owns and operates a portfolio of nine Formule 1 hotels in the country.

"The deal is in a very advanced stage of negotiations and will get concluded very soon. Accordingly, the Formule 1 hotels portfolio will be rebranded after the transaction goes through," said sources privy to the development.

"We do not have any comments," said an AccorHotels India spokesperson.

While valuation for Accor's 40% shareholding is being worked out, DNA Money has learnt that the stake is getting acquired by SAMHI Hotels that was co-founded by Ashish Jakhanwala, Manav Thadani and Steve Rushmore in 2010.

SAMHI Hotels – which is backed by global private equity investment firms like Equity International, GTI Capital Group, International Finance Corporation Goldman Sachs – declined to comment on the development.

SAMHI had acquired 60% in Barque Hotels back in October 2012 for an undisclosed sum. It was to invest $40-50 million (including money paid for Accor's 60% stake) in Barque Hotels to complete Formule 1 hotels that were under various stages of development, SAMHI co-founder Jakhanwala had said then. SAMHI's Formule 1 portfolio comprises of 15 hotels of which six are still under construction.

The budget hospitality market in India has been a tough segment to crack for AccorHotels ever since it announced ambitious plans to make it big with Formule 1 hotels in the country. In 2009, AccorHotels's Singapore arm (Accor Hospitality) had earmarked an investment of Rs 366 crore when setting up a wholly-owned subsidiary (Barque) for the budget hotels foray. But this was only after its joint venture with Emaar-MGF (formed in the year 2006) for 100 Formule 1 branded hotels failed to take off. The JV was targeting to have 50 such hotels operational by 2011-12.

In 2010, the Accor top management was seriously considering the possibility of replacing their Formule 1 branded hotel developments with another brand called 'Etap'. While both brands were similar in terms of product offering Etap was specifically used for the European market and properties outside (particularly in Asia) market were operated under Formule 1.

However, in late 2011, Accor undertook a consolidation exercise whereby its budget segment brands viz. All Seasons (a resort-style product), and Etap Hotels/ Formule 1 were merged into the Ibis brand. "From 2012, Ibis will be divided into three different colours – the blue will be the shade of 'Ibis Budget', which will replace both Formule 1 and Etap Hotels brands; the red will be kept for the standard Ibis brand, which is equivalent to two- to three-star hotels and the green will grace the new 'Ibis Style', previously All Seasons hotels," Accor's new CEO and president, Denis Hennequin had said then.

SAMHI Hotels, which recently completed acquisition of the UK hospitality chain Whitbread Plc's Premier Inn hotels portfolio in India for around Rs 200 crore, is in the process of rebranding these hotels to Fairfield by Marriott. In 2011, the world's largest hotel chain Marriott International (post recent merger of Starwood Hotels & Resorts) also entered a joint venture with SAMHI Hotels to build a chain of 15 Fairfield by Marriott hotels in India. Currently, there are three (Fairfield by Marriott) operational hotels in Bengaluru and Coimbatore with another under construction one in Chennai.

It is not clear whether SAMHI will choose any of the existing brands or go for a new one when rebranding the Formule 1 hotels.

SAMHI's current portfolio comprises 25 hotels with 3,900 rooms across 12 cities under brands including Courtyard by Marriott, Fairfield by Marriott, Four Points by Sheraton, Hyatt Place, Hyatt Regency, Caspia Hotel, Sheraton and Formule 1.


Partner SAMHI Hotels to own 100%, likely to rebrand the budget hotel portfolio.

SAMHI had acquired 60% in Barque Hotels back in October 2012 for an undisclosed sum.

It was to invest $40-50 million (including money paid for Accor's 60% stake) in Barque Hotels.
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