Reports are surfacing that Accor plans to slow construction of new hotels in Brazil this year, focusing instead on deals to convert independent hotels into franchisees in order to maintain growth in a weakening Brazilian economy.
According to Reuters, Accor's head of new business in the Americas, Abel Castro, said that the group planned to sign contracts for 10 conversions this year, double the number of deals last year, when it started the new strategy.
"Today the market isn't as active as it was last year and the outlook is more cautious. Since you may see weaker demand, independent hotels understand the need to be connected with an international brand," Castro said.
Accor executives warned last month of a cautious outlook in Brazil, which contributes 7 percent of the group's revenue.
By 2020, Accor plans to have 500 hotels in South America, almost double its existing 251 properties, Castro said. The group now has 190 new projects under development in the region.
Accor has 220 hotels in Brazil.