European Hotel Operator Accor Posts $2 Billion Q3 Profit Amid Reorganization
The pool at Accor's Sofitel Mogador in Morocco. Jon Lean / Flickr
Accor is one year into a three-year reorganization that will see the hotel operator invest in emerging markets and move away from leased and owned properties. A profit drop is due to the restructuring and a still rebounding European marketplace.
Accor SA, Europe’s largest hotel operator, said third-quarter revenue fell 3.1 percent because of the euro’s strength and divestments.
Accor is in the first year of a three-year reorganization that includes building its business in emerging markets, reducing debt, selling some properties and cutting costs. It plans to reduce its share of leased or owned properties to 20 percent by 2016, from about 58 percent, with the rest operated under franchise or management contracts.
Accor said it opened 14,100 rooms during the first nine months. Its three-year plan foresees opening 30,000 rooms a year through 2016.
Sebastien Bazin, the former head of European investing at Accor shareholder Colony Capital LLC, was appointed chairman and chief executive officer in August after Accor fired his predecessor, Denis Hennequin, in April.
Accor sold its chain of more than 1,100 Motel 6 budget hotels in North America to Blackstone Group LP for $1.9 billion last year. The company used some of the proceeds to expand in regions including Asia.
“Accor is pursuing its growth and remains confident for the last part of the year, thanks to solid demand in Europe and the growth dynamic in emerging markets,” the company said in the statement.
Demand in southern Europe, Australia and China stabilized in the third quarter, though it remains fragile, the company said.
Accor repeated its estimate for full-year earnings before interest and taxes of 510 million euros to 530 million euros.
Editors: Ross Larsen and Jeffrey St.Onge.
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