Accor is still seemingly on the hunt for acquisitions, and this one is pretty eye-catching. Treebo and its rival Oyo have disrupted the Indian hotel market, and now it looks like they will do the same in Europe and elsewhere.
Accor has been fairly quiet over the last couple of months on the acquisition front but it looks like another deal is in the offing with reports in India suggesting the French company is keen on investing in Indian budget hotel brand Treebo.
Oyo’s rapid rise has helped elevate it above the competition. It has raised $1.7 billion in funding whereas competitors like Treebo and FabHotels have only managed $57 million and $35.3 million respectively. Accor’s potential investment might help redress the balance.
Accor’s investment is reportedly around the $40 million range, according to the Economic Times of India — a relatively small outlay that could turn out to be pretty useful if Treebo can grow outside of the Indian subcontinent.
Analysts at Bernstein suggest that Accor could use Treebo to increase its branding across Europe, where there are a larger proportion of unbranded properties, compared with the United States. Oyo itself has begun to creep into the European market.
“Terms of the deal are not disclosed, but Accor’s minority stakes often mean licenses to develop brands outside the home market… If that is the case, Accor could roll Treebo out in Europe and offer a branded solution to the myriad of small/budget hotels,” analysts said of an Accor-Treebo deal.
Accor and Treebo have yet to respond to Skift’s request for comment.
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Photo Credit: A Treebo hotel room. The company is a rival to Oyo. Treebo