Seizing the Potential of India’s Emerging Middle Class – Insights from Accor’s Sébastien Bazin

Sébastien Bazin, the Chairman and CEO of Accor, emphasized the critical role of demography and the emerging middle class in the success of hotel companies during a recent industry event. Bazin’s insights were shared at the HICSA Conference, where he highlighted that India, in particular, has seen a significant rise in its middle-class population, which has contributed to 25% of the global growth in this demographic over the past decade.

According to a report by Skift, the expanding Indian middle class is a key factor propelling the hospitality industry forward. The middle class in India currently represents 31% of the total population, with expectations to grow to 38% by 2031 and 60% by 2047. Remarkably, a majority of the population, 65%, is below the age of 35, indicating a young and dynamic consumer base.

Bazin remarked, “India has been taking the lead in terms of economy and is the fastest growing country in the world right now.” He sees India as a vast and largely untapped market for branded hotels, with less than 200,000 branded hotel rooms compared to 3 million unbranded accommodations, despite having a population similar to China.

For more context on Accor’s presence and plans in India, the company currently operates 62 hotels in the country, with nine additional properties scheduled to open this year. Following a record year of signing 11 new hotels and opening six, Bazin pointed out that the top five hotel operators in India collectively manage less than 1,000 hotels, a stark contrast to the 25,000 in China. He used the example of Accor in France, which operates 2,000 hotels for a population of 70 million.

Bazin challenged the industry, questioning how the collective goal of expanding to 15,000 hotels could be achieved without a 15-year wait list. He identified a demand for affordable accommodations and the desire of the emerging middle class to explore the country as key factors driving this growth.

To unlock the potential of the Indian market, Bazin suggested focusing on secondary and tertiary cities, where 1 billion out of 1.4 billion Indians reside. He proposed that identifying five families in each city with the capacity to invest in hotel development could be a viable strategy, acknowledging that these families and their investment potential vary from city to city.

Bazin also recognized the existence of airlines and their hubs in these cities, which further supports the feasibility of establishing hotels in these areas.

In terms of achieving the ambitious goal of significant growth, Bazin advised hoteliers to be agile, adaptable, patient, and trustworthy. He encouraged the industry to set their sights high, stating, “India has the potential and need for 10 times that ambition.”

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