Mon, Apr 12, 2004 - Page 11 News List

Economy flights in Asia may provide a boost to hotels


Asia's expanding pool of middle-class travelers and the sudden proliferation of budget carriers in the region have boosted the hopes of European hotel group Accor.

Company executives are confident that its economy brand Ibis will attract a new breed of Asian consumers who do not mind flying on no-frills carriers and are not keen to put up in five-star hotels, even if they can afford to.

"With all the low-cost carriers, there is going to be good opportunity in the economy sector which doesn't really exist in Asia, not with international hotels," Accor's regional managing director Michael Issenberg said last week.

Accor also runs the globally recognized deluxe Sofitel and Novotel hotel brands. The French-listed hotel group, with revenues of US$8.25 billion last year, already has a huge regional presence.

While the deluxe hotel business will remain an important source of income, Accor also sees lucrative opportunities in economy-class hotels which Issenberg described as possibly the "largest potential market" of customers.

The growing popularity of low-cost carriers in Asia, with Australia's Qantas the latest entrant, fits in nicely with Accor's plans to expand its chain of economy hotels.

"If someone is buying an inexpensive air fare, they are not going to want to stay in an expensive hotel," Issenberg said.

"The largest growth in travel in Asia comes from inexperienced travelers who will obviously not be looking to stay in five-star hotels but who would like an international brand as long as it is affordable."

According to Issenberg, Accor has enjoyed huge success with Ibis in Asian markets where the economy brand has been introduced, mainly in China, South Korea and Hong Kong.

"Most international companies that have entered the Asian hotel sector have concentrated on the higher end of the market and largely relied on international business," said Issenberg.

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