Economy hotels drive Accor profits

In its financial results for 2008, the Accor hotel group is showing that it has managed to withstand worsening economic conditions around the globe.

The company’s operating profit before taxes and one-time charges was €875 million for the year, in line with expectations, and up by 13 per cent over the previous year, excluding the impact of shareholder return.

Accor’s operating margin increased by one point, to 29.6 per cent.

Consolidated revenues for the year totalled 7.73 million euros, representing an increase of 2.8 percent on a comparable scope of consolidation and exchange rates and a 4.7 per cent decline as was reported.

Revenue was negatively impacted by significant asset disposals during 2008 and the unfavourable effect of currencies, most notably the US dollar and the British pound in relation to the euro.

The like-for-like growth of 2.8 per cent is attributed to sustained gains in Prepaid Services and economy hotels located outside the US.

Depending on demand across the globe, Accor indicated that it would focus its capital expenditure expansion on the economy hotel market outside the US and on asset-light operations in the mid-scale and upscale markets.

The group noted that it may shift to property acquisitions from organic growth.

In 2008, Accor opened 28,000 new rooms, 89 per cent of which were in the economy and mid-scale market segments.

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