AccorHotels will divest a 40-percent stake in India-based Barque Hotels in a deal with Samhi Hotels to fully end its investment in the group, which operates a portfolio of nine Formule 1 hotels in India. "The deal is in a very advanced stage of negotiations, and will get concluded soon," sources told DNA India.

　　Upon completion of the portfolio sale, the Formule 1 hotels will be rebranded, although it is not yet clear if Samhi will bring the hotels under one of its existing brands or a new one. Meanwhile, the groups are negotiating the value of Accor's 40-percent stake.

　　Within this transaction, Samhi will acquire the remainder stake in Barque Hotels. It acquired 60 percent of the company in October 2012 for an undisclosed price. According to Samhi's co-founder Ashish Jakhanwala, the group acquired the stake in order to invest $40-50 million plus money paid for Accor's 60-percent stake in Barque Hotels to complete the development of the Formule 1-brand hotel properties. Now, Samhi operates a portfolio of 15 Formule 1 hotels, six of which are still under construction.

　　Overcoming Challenges

　　AccorHotels has faced several hurdles to break into India's budget hotel sector ever since it announced the development of its Formule 1 hotels in the country. Accor Hospitality, AccorHotel's Singapore division, had set plans to invest Rs366 crore to set up wholly-owned subsidiary Barque Hotels in 2009 as part of the group's expansion into budget hotels. However, Accor's JV with Emaar-MGF in 2006 to develop 100 Formule 1 hotels failed. The two groups were gearing up to open 50 of these by 2011-2012 at the time.

　　The company's top management was seriously mulling over replacing the Formule 1 brand hotels with Etap properties, which are specifically used for the European market in 2010. Meanwhile, properties outside the market, particularly in Asia, would keep the Formule 1 management. AccorHotels consolidated its budget hotel brands in late 2011 as the group brought its All Seasons and Etap Hotels/Formule 1 brands under the Ibis brand. "From 2012, Ibis will be divided into three different colors—the blue will be the shade of Ibis Budget, which will replace both Formule 1 and Etap Hotels brands; the red will be kept for the standard Ibis brand, which is equivalent to two- to three-star hotels and the green will grace the new Ibis Style, previously All Seasons hotels," Dennis Hennequin, Accor's CEO and president at the time, told Daily News & Analysis.

　　Samhi Hotels is also undergoing some rebranding of its own by bringing its newly acquired Premier Inn hotel portfolio in India, which it bought from Whitbread for about Rs200 crore, under the Fairfield by Marriot brand. Marriott International began its joint venture with Samhi Hotels in 2011 to develop 15 Fairfield by Marriott Hotels in India, three of which are currently operational in Bengalaru and Coimbatore while one Chennai property is still under construction.   

　　Samhi, which was co-founded by Jakhanwala, Manav Thadani and Steve Rushmore in 2010, currently operates a 25-hotel portfolio of 3,900 guestrooms across 12 cities under the Courtyard by Marriott, Fairfield by Marriott, Four Points by Sheraton, Hyatt Place, Hyatt Regency, Caspia Hotel, Sheraton and Formule 1 brands. The group is backed by global private equity investment firms, including Equity International, GTI Capital Group and Goldman Sachs.