ACCOR SA is on track to sign a record of about 125 hotel partnership projects in China this year, doubling down on its expansion in a country where tourism has become one of few bright spots.

The French hospitality giant currently has more than 640 hotels across greater China, which are either joint operations with landlords or fully franchised under its “asset-light” model, according to Accor’s greater China chief executive officer Gary Rosen.

It’s also in talks with potential partners to introduce the region’s first project under its Orient Express brand, Rosen said.

Accor has already announced its first three hotels under the Orient Express brand — known for the namesake Paris-Istanbul sleeper train that traces its history back to 1883 — in Italy and Saudi Arabia.

Accor’s hotels in China range from luxury brands Raffles, Fairmont and Sofitel to mid-market chains Ibis and Mercure, and the region contributes one-fifth of the group’s revenue in Asia Pacific and the Middle East.

The company’s accelerated expansion in China comes as the Asian country’s domestic travel has seen a strong rebound, particularly during the peak summer season.

Consumers are increasingly spending on leisure and entertainment activities instead of big-ticket items, benefitting industries including hospitality.

“People’s decision-making and their consumption patterns have changed,” Rosen said. “People are making choices that are a little bit reminiscent of this ‘going back to the savings’ mode. People are spending less on certain items, but what we’ve seen actually is coming out of COVID, people really have continued this pent-up demand for travel,” which contributed to a record breaking summer performance for the group in China.

Revenue per available room and occupancy rates on the Chinese mainland and in Macao have returned to or exceeded 2019 levels, while Hong Kong’s have not fully recovered, he said, without elaborating.

Accor’s asset-light model means the group works with Chinese developers, but an increasing number of them are struggling to stave off defaults after years of excessive debt-fueled expansion.

Among the company’s partnerships is a deal to franchise its Jo&Joe brand to a unit of Country Garden Holdings Co., which had targeted opening more than 1,000 of the hotels over the next three decades.

Rosen said that while Country Garden is facing challenges in its residential businesses, there’s little impact on its hotel side, with the developer having made due payments to Accor and the first three Jo&Joe hotels on track to open this year. (SD-Agencies)