Accor, the French hotel operator, plans to tap into anticipated demand for mid-market hotels in Dubai ahead of the emirate's hosting of the World Expo in 2020.

It aims to open 100 hotels in the Middle East in the next three years, with nine in the UAE as it steps up its presence in Dubai.

The company has 19 hotels in the UAE currently, accounting for 5,500 rooms, which is almost a third of its room count in the region from 62 properties. By 2016, it expects to have 2,500 additional rooms in the UAE.

It is already revising its target following Dubai’s clinching in November of the World Expo 2020.

“We are at the discussion level for hotels near the Expo 2020 area and we are in talks for midscale and economy hotels [there],” said Christophe Landais, the managing director of Accor Middle East.

While Accor’s strength lies in this segment, according to John Podaras, the Dubai-based partner at consultancy Hotel Development Resources, there is also considerable government stress to develop this segment, especially ahead of World Expo 2020.

In September, Dubai announced a tax reprieve to new mid-range hotels to meet demand for such properties. The eligible hotels are exempted from the 10 per cent municipality fee levied on the daily room rate if the construction permit is granted before December 2017.

Accor also launched its Arabic booking website yesterday targeting travellers from Egypt, Levant and the Arabian Gulf. Around 26 per cent of its revenues come from the web, and of that two-thirds come from the region, according to Jean-Luc Chretien, Accor’s executive vice president for sales, distribution and loyalty. The web revenues from the region grew 32 per cent last year compared to the year before.

Last year, Accor’s websites generated 2 billion euros in revenues, with the top regions being Europe, Brazil and the Pacific area.

With its focus on the UAE and Saudi Arabia, Accor’s interest follows that of other international operators. The Marriott International is expected to open its property in Al Jaddaf with 352 rooms this month. It also expects to open the 195-room Courtyard by Marriott Abu Dhabi Central Market, as well as the second tower at JW Marriott Marquis with 804 rooms.

“Other markets have dried up compared to the ones in the region and the kind of return on investment we are seeing, especially in the Gulf, makes this an attractive region,” said Mr Podaras. “And the market is still developing here, especially in the mid-market segment.”

In the Middle East and North Africa region, Dubai is the most attractive market for international hotel operators because of the amount of investment coming in and the ease of doing business here, Mr Podaras said.

It would be followed by Saudi Arabia, despite significant challenges there for operators such as bringing in experienced executives from outside due to the Saudisation programme, as well as Qatar, he added.

Paris-listed Accor opened its first economy hotel under the Ibis brand in 2003 at Dubai World Trade Center. It expects to open its second similar property at the same location by 2016.

“We follow the demand, in 2003 there were less than 4 million people in the UAE and now there is more than 9 million,” Mr Landais said.

This year, it expects to open seven properties in the UAE, including four in Dubai such as the 350-room Sofitel Downtown in the second quarter, along with a 350-room Novotel in Abu Dhabi on Airport Road in this quarter, and linked to it 270 apartments under the Adagio brand. Three properties are slated for Fujairah.

While some of its luxury and upscale brands such as the boutique Sofitel SO and MGallery, are yet to enter the UAE, here the market is split among 40 per cent luxury and upscale properties, 40 per cent mid market and the rest in economy segment, Mr Landais said.

Accor’s shares were trading at 34.56 euros (Dh172.43), up 0.19 per cent from yesterday’s close. That was it’s highest in a year.

Saudi Arabia is the second focus market for the company, which has a market cap of 7.76 billion euros.

“Of the 14 new contracts we signed in 2013, 10 are in Saudi Arabia,” Mr Landais said. “It has a vast domestic market with a focus on developing the affordable segment.”

ssahoo@thenational.ae