French group Accor plans to add new hotels in Chile

The company, which has been operating in the country for more than 20 years, announced its plans to add at least seven hotel assets to its portfolio in Chile, which would amount to more than 900 additional rooms.

French hotel chain Accor—which operates the Ibis, Pullman, and Novotel brands, among others—announced that it plans to incorporate new assets in the country as part of its business recovery. The announcement comes with recovery having been slower than expected in Chile for both the international tourism and business travel segments.

The group operates in an atomized market with competitors that are differentiated on price, often with three or four-star hotels.

The company highlighted its «good performance» in 2023, with post-pandemic recovery continuing and growth of 13% in revenue per available room (RevPAR), driven in part by an increase in rates.

They also noted that the occupancy rate reached 60% to the end of October.

«2023 has been phenomenal for Accor. After two very difficult years, I hope this will be the last time that I have to talk about the pandemic,» said Thomas Dubaere, CEO Americas of Accor’s Premium, Midscale, and Economy divisions.

Tourism: International leisure and business travelers

Although Dubaere noted that the occupancy rate is above the average for the region (58%), the recovery in the number of foreign tourists traveling to Chile has been slower than in other countries.

Unlike Brazil, where the core market is domestic, in relative terms «Chile has a more important international flow» in the hotel business, he explained.

Business travel has not returned to pre-pandemic levels, in contrast to what has been observed in the leisure segment. «We’ve still not returned to 2019 levels in the business segment, while the leisure segment has already comfortably exceeded this,» he said. «In 2024, we expect to reach the same level as 2019 in the business segment,» he added.

Mauro Rial, the French company’s Chief Operating Officer (COO) for North & Hispanic America, noted that this reduction has been offset «through the domestic leisure and business segment, and corporate events are starting to recover.»

French investment in Chile

The company, which has been operating in the country for more than 20 years, has plans to add at least seven hotel assets to its portfolio in Chile, which would amount to more than 900 additional rooms.

These plans form part of the French chain’s growth strategy in the region, Dubaere noted. It currently has 450 hotels across the continent, and expects that figure to increase to 600 in the next four years.

In the Chilean market, Accor has said that two hotels are in the pipeline, while the rest are still in the negotiation phase.

The group currently has 26 hotels in Chile through its Pullman, Novotel, Mercure, and Ibis (Ibis Budget, Ibis Styles, and Ibis) brands, with a total of more than 4,000 rooms.

As part of the chain’s expansion plans, Rial commented that the company is in negotiations to incorporate a hotel in Chile to form part of its «Handwritten» brand, which was launched at the start of 2023 with establishments in Australia, China, Italy, and France.

Accor has presented this brand as a «collection» operating in the boutique segment. «We are currently in advanced negotiations to convert a hotel here in Santiago under this brand,» said Rial, without giving further details.

«Interest rates remain high both in Chile and in the rest of the world and, also partially in due to the situation in Chile, the sources of financing are a little restricted at the moment. As such, we’re seeing a reduction in new hotel projects,» he added.

According to his figures, approximately 60% of hotels in Chile «are independent hotels that are facing challenges because they don’t have a robust distribution channel or a loyalty program.» Local and South American franchises As part of these plans, the French group is focusing on franchises.

Dubaere said that it sees an opportunity to grow in Chile through the franchise model, given that «these hotels lack the distribution of an international chain that has flows in all countries (…). I think that there is still potential to reach 40 hotels in Chile,» he emphasized.

In South America, the company is aiming to strengthen its position in Chile, Argentina, and Colombia through «existing franchisers and new commercial partners» in order to add more than 80 hotels across the Premium, Midscale, and Economy categories in these countries.

With more than 100 national parks and nature reserves, 4,000 kilometers of coastline and the world’s driest desert, to mention just a few of its natural attractions, Chile has consolidated its position as a leading global tourism destination.