2 Min Read
PARIS, March 2 (Reuters) - AccorHotels has signed an agreement to take over the management of 26 hotels in Brazil, Europe's largest hotel group said on Thursday, continuing its expansion in the recession-hit South American country.
The purchase for 60 million euros ($63.01 million) of a portfolio of budget, mid-market and luxury hotels in cities such as Rio de Janeiro and Sao Paulo from Brazil Hospitality Group (BHG) -- Brazil's third-largest hotel group -- will boost Accor's earnings from 2018, the company said.
The Brazilian economy contracted sharply in 2016 for the second year in a row, but Accor's Chief Development Officer Gaurav Bhushan told Reuters that it is during tough economic times that you can find interesting investment opportunities and gain scale in an emerging market that is bound to recover.
Accor currently has 252 hotels in Brazil, which already makes it Brazil's largest hotel operator, ahead of domestic player Atlantica Hotels.
The French company aims to open at least 30 to 40 hotels a year in Brazil over the mid-term, Bhushan said.
AccorHotels, with more than 4,000 hotels worldwide ranging from the budget Ibis to luxury Sofitel brand, competes with InterContinental (IHG.L), Marriott (MAR.O) and Starwood.
Brazil is the group's fourth-largest market behind France, Germany and Britain, making up 7 percent of group sales.
AccorHotels itself has not been immune to Brazil's problems. Brazil was one of the group's worst-performing countries last year, alongside France, with a 2.4 percent sales decline.
Chief Executive Sebastien Bazin said at last week's 2016 results presentation that "it's a good time to invest in Brazil".
"Even though we don't know whether it will take a year, two years, three years to turn the situation around, it's important to know when to invest," he added. ($1 = 0.9522 euros) (Editing by David Goodman)