Accor is joining forces with China Lodging Group as part of an effort to kick start development of the French company’s midscale and economy hotels in China.
The two publicly traded hotel powerhouses announced Monday a wide-ranging agreement that will see Shanghai-based China Lodging take over Accor’s midscale and economy brands as part of a 70-year master franchise deal in China. The plan is for China Lodging to eventually develop 350 to 400 such hotels for Accor in the country.

“China Lodging is very powerful in the medium range and low-cost segment. … Accor could not continue to grow without finding a strategic alliance with one of these groups,” Sébastien Bazin, chairman and CEO of Accor, told a group of analysts and journalists via a translator.

During the meeting, which was broadcast over the Internet, Bazin said Accor proposes taking a 10% equity stake in China Lodging. China Lodging in return will assume a 10% position in Accor’s luxury brands. Bazin said the deal is unlikely to close before the second half of 2015.