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Accor's MGallery projects luxury

ACCOR SA unveiled its MGallery label in China yesterday, with the opening of the 75-room Songtsam Retreat at Shangri-la in Yunnan Province, as Europe's largest hotel group bids to cement its position in the country's upscale travel market.

The Paris-based company, which operates 77 hotels across the country with another 80 in the pipeline, however, emphasized that it will probably focus on the mid-scale and economy sectors. It also sees tremendous opportunities in the country's second and third-tier cities.

"We aim to be a leader in the mid-scale and economy hotel markets as well as remain a major player in the upscale luxury market," said Robert Murray, senior vice president of Accor's China operations. "The introduction of the MGallery label into the China market reflects our intention to further consolidate Accor's brand portfolio and our commitment to offer greater choices to our guests."

The MGallery label is a collection of upscale boutique hotels which will keep their own identities and names.

Hotels in China, especially the most upscale properties, have seen a drop in the occupancy rate as well as a cut in room prices since last year because of the global financial turmoil and a slowing Chinese economy.

A survey by the China Tourist Hotels Association found the average occupancy rate at the country's five-star hotels plunged to 53 percent from 65 percent year on year between September 2008 and January. Five-star hotels also lost the most in average daily room rate, from 786 yuan (US$115) to 767 yuan.

"The five-star hotel market in China is somewhat crowded and with more in the pipeline. The oversupply will become a big problem," David Sun, chief executive of Home Inns & Hotels Management Inc, operator of China's largest budget hotel chain, said.


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