Under the deal, Accor will take a 10 per cent stake in the Huazhu Hotels Group, also known as China Lodging Group, and a seat on the board.

In turn, Accor's ibis, ibis Styles, Mercure, Novotel and Grand Mercure hotels in China will become part of Huazhu under a master-franchise for China, with a plan to develop 350 to 400 new Accor-branded hotels in the midterm.

For its part of the plan, Huazhu will take a 10 per cent interest in Accor's luxury and upscale business in China and will help support future development in the country. Huazhu will also envelop the Accor economy and midscale platform in China.

Accor will continue to lead the ownership and development of the luxury and other upscale brands in China, including Sofitel, Pullman, MGallery and The Sebel.

Accor currently has 144 hotels in China across eight brands including Sofitel, Pullman, MGallery, Grand Mercure; midscale, Novotel, Mercure, and economy (ibis, ibis Styles).

The group has been present in China for more than three decades, as well as Europe, Latin America, Africa and the Middle East, as well as Australasia and recently opened a new Mercure brand in Bali's Legian district and a Sofitel at Nusa Dua.

Accor's chairman and chief executive, Sebastien Bazin, said the deal will "leverage the strengths of Accor's global brands with a leading player in Chinese hospitality", Mr Bazin said.

Huazhu founder, chairman and chief executive, Ji Qi, said with an extensive brand portfolio and strong distribution and loyalty platforms, Accor and Huazhu share a lot of common values.

"By combining forces we can facilitate growth and attract more customers to the expanded network,"  Ji Qi said.

All Accor's existing hotels in China will continue to be operated under their current international brand standards, benefitting from current global distribution and loyalty platforms, together with the added support of Huazhu's networks and domestic reputation.

The hotel sector is tipped to be one of the busier in the coming 12 months, thanks to the lower Australian dollar for inbound tourists and the recent signing of the free trade agreement between China and Australia.

According to agents, the flow of business for hotels, between international and domestic visitors, could converge in the coming year, as the industry see locals having "staycations" and the new property owners from China will be travelling back and forwards to visit friends and family.

Simon Hemphill, NSW head of research at Savills, said strong forecasts for increases to both overseas and domestic visitors, and in turn tourism expenditure, should continue to improve investment metrics for the Australian hotel market.

"The latest issue of Tourism Research Australia's bi-annual Tourism Forecasts (June 2014) estimates international visitor arrivals will grow 5.7 per cent to seven million to June 2015. Longer term, international visitor arrivals are forecast to grow 4.5 per cent annually through to 2022-23," Mr Hemphill said.

Stephen Burt, managing director of hotels, Asia Pacific for Colliers International, said Australia's hotel industry is undergoing a rejuvenation of room inventory in major markets on a scale not seen since the early 1990s.

He added the total returns from the hotel sector have outperformed other major commercial property sectors over the medium term, having averaged 11.7 per cent over the past five years, compared with 9.5 per cent for industrial, 9.0 per cent for retail and 8.7 per cent for the office sector.

"With such strong returns from the sector, increased visitor numbers and a wave of capital coming into Australia to invest in this asset class, the time is right for the industry to reinvigorate," Mr Burt said.

Aside from the spate of mergers with brands, the sector, in the future will focus on the local area.

"In the past major international hotel operators have developed their brands around key offerings, and consequently their hotels in Melbourne have been identical to their hotels in Chicago, or Mumbai," Mr Burt said.

"However, operators are now realising travellers are demanding a more local experience.

"So while all the back-end systems will be the same, the hotel itself will be more sympathetic to its local environment, showcasing all of the local artwork, products, attractions and geographic features specific to the hotel's location.

"These brands are allowing their hotels to express their own spirit. Examples include Accor's Sofitel So brand, Marriott's Autograph Collection, Intercontinental Hotel's Hotel Indigo and Starwood's Aloft Hotels."