Emaar MGF and Accor on Monday announced a joint venture to bring the Formule 1 brand of budget hotels to India. The new venture, Budget Hotels India, has planned investments of $300 million over ten years.
Emaar MGF is a partnership between global property developer Emaar Properties and MGF Developments.
The company has already identified potential locations across the country for the development of Formule 1 hotels.
Starting with major metros, the company is looking at developing 50 hotels in the first five years of its operations, with the remaining 50 to be developed in the second phase. The total development will add 10,000 hotels rooms that cater for the budget travellers.
The agreement to form the JV was signed on Monday in the presence of Emaar Properties Chairman Mohamed Ali Alabbar and Accor SA CEO Gilles Pelisson.
"India is a key growth market for Emaar, and we have committed $1 billion - the country's largest ever foreign direct investment in the real estate sector -
to develop several projects across the country," Alabbar said.
"Alongside master-planned residential communities and special economic zones, we regard the hospitality sector as integral in our growth strategy for India. The tie-up with Accor marks our foray into budget hotels - a niche segment that has tremendous growth potential."
Pelisson said: "The Formule 1 product is ideally suited for India's rapidly growing tourism market. The brand is recognized as the international benchmark for budget hotels and has been successful in both established and emerging economies. India has one of the world's most dynamic economies and there is currently a vast undersupply of quality accommodation.