Starting with major Indian metros, the company seeks to develop 50 hotels in the first five years of its operations; another 50 are to be developed in the second phase. Emaar MGF is a partnership between Dubai-listed property developer Emaar Properties and MGF Developments, a locally based realty developer.

"India is a key growth market for us," says Emaar Properties chairman Mohamed Ali Alabbar. "We have committed $1 billion, the country's largest-ever foreign direct investment in the real estate sector, to develop several projects across the country. Alongside master-planned residential communities and special economic zones, we regard the hospitality sector as integral in our growth strategy for India."

Alabbar adds that the new tie-up with Accor will mark Emaar MGF's entry into the niche budget-hotel segment. Emaar MGF may float 5% to 10% of its equity in an IPO next year, says managing director Shravan Gupta. French hotel chain Accor specializes in economy and budget hotels. With its Formule 1, Ibis and other hotel investments, Accor has emerged as one of the largest international investors in the Indian hotel sector.