A HOTEL sales and distribution network joint venture by global hotel group Accor and China's leading hotel company, Jinjiang International Management Corp is expecting final government approval in the coming month.

Reggie Shiu

Three offices will be opened in Shanghai, Guangzhou and Beijing to handle the 68 hotels nationwide managed by both groups, 15 of which are Accor operations. Together, these two organizations have hotels all across China.

Such co-operation in sales is novel to China, and the decision to link with a foreign group is seen as far-sighted.

"It's a double-win move," said Reggie Shiu, Accor's senior vice-president in Asia. "We have not only turned from competitors to partners, but also expanded our businesses with low investment, as we can make use of each other's experience and hardware."

He described co-operative move as "one plus one equals three".

The centres will target national and provincial accounts with the Accor Reservation System being used as the technical base. A local language website will be established to provide booking and reservation solutions as a one-stop service for the domestic market.

Two years ago, the Accor group began to recognize the importance of the China market and has so far established 15 hotels in the country. However, Shiu noted that development has been slow, even with the group's rich experience and advanced reservation system.

The Jinjiang group, which operates hotels of various quality-levels, hotels under their management sometimes engaged in competition among themselves, limiting progress of the overall group.

"Mainland hotel heads have realized the importance of keeping pace with the world," said Shiu, who is a Hongkonger and has worked with Accor for about 22 years.

He recalled that years ago some domestic hotel managers failed to understand effective management approaches. Now, many of them are trying to learn international practices.

Accor has been actively seeking local partners in the past two years. Recently, it has joined in a joint venture hotel management company with Beijing Tourism Group, with master franchise rights to manage and expand the three-star Mercure brand north of China's Yangtze River.

Shiu said Accor is different from other international hotel groups attaching great importance to lower star-ranked hotels.

"Four or five star hotels have their limitation, because only several large cities in China have the demand for such operations. However, for many cities in central China, two and three star hotels are needed," Shiu said.

He said lower star hotels also have better profits than high-star ones. Accor will open a two-star Ibis hotel in West China next year.

Shiu predicted the new sales and distribution network with Jin Jiang will take effect within 12 months after its establishment.

"Our decision must be to follow the trend after China's entry to the World Trade Organization," he said.