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Accor Jumps Following 65% Earnings Growth Forecast

Aug. 26 (Bloomberg) -- Accor SA rose the most in 3 1/2 months in Paris trading as Europe’s largest hotelier forecast 65 percent growth in full-year operating profit, helped by sales gains at its higher-priced lodgings.

The shares gained as much as 6.9 percent to 25.13 euros, the biggest intraday jump since May 10.

Earnings before interest and taxes this year will total 370 million euros ($470 million) to 390 million euros, increasing from 236 million euros in 2009, Accor said today. The first-half net loss narrowed and revenue per available room increased, said the hotelier, whose brands include Motel 6, Ibis and Sofitel.

“Consensus forecasts should rise considerably on the back of results and guidance,” Vicki Lee, an analyst at Barclays Capital in London, said in a report today, adding that Accor’s forecast is 27 percent higher than analysts’ estimates.

The lodging industry has raised occupancy rates and prices this year as it recovers from the recession that deterred vacationers and led companies to cut travel budgets, according to researcher STR Global. Accor said profit will be helped by spending cuts and a rebound in sales, led by growth in Europe.

“July was very good and August is looking good as well,” Chief Executive Officer Gilles Pelisson said today on a conference call. Accor can’t specify a forecast for the second half amid an “uncertain” economic environment, he said.

Barriere’s Sale

The shares were up 3.9 percent as of 10:40 a.m. in Paris trading. They have fallen 1.8 percent this year, valuing the Evry, France-based company at 5.56 billion euros. That compares with InterContinental Hotels Group Plc’s 14 percent gain.

The net loss on a pro-forma basis narrowed to 64 million euros from 236 million euros a year earlier, Accor said. Excluding costs and taxes from spinning off the former Edenred voucher-service unit, net income was 12 million euros, it said.

The operating-profit forecast excludes casino operator Groupe Lucien Barriere and Cie. des Wagons-Lits train sleeping-car unit, which the company plans to sell. Accor owns 49 percent of Barriere and is waiting to receive valuations regarding an initial public offering of the business, said Pelisson. The company is under no pressure to sell after disposing of real estate, he said.

Revenue per available room at Accor’s upscale and midscale hotel divisions in Europe rose 14 percent in July, accelerating from a first-half increase of 7.1 percent. The economy brands’ revenue per room rose by 5.6 percent in July in Europe, compared with 3 percent growth in the first half, and by 5.2 percent in the U.S., versus a 4.2 percent drop in the first six months.

Debt-Reduction Plan

Accor aims to sell some hotels to cut debt while obtaining 80 percent of its new rooms through management contracts and franchises, following a strategy adopted by InterContinental. About 40 percent of Accor’s hotels are owned and leased.

The French company opened 93 hotels in the first half, most in Europe and Asia. More than 200 hotels, or over 26,000 rooms, are scheduled to open this year and the company has a pipeline of 102,000 rooms by 2013.

Accor also said it plans to speed up asset disposals and reduce net debt by as much as 650 million euros this year.

Divisions of Credit Agricole SA, France’s biggest bank by branches, and real-estate manager Fonciere des Regions SA will buy 48 hotels in Europe from Accor for 367 million euros under the property-sale program, the company said on Aug. 23. Accor will continue to run the hotels.

First-half revenue rose 6.1 percent to 2.85 billion euros, Accor said on July 20.

To contact the reporter on this story: Armorel Kenna in Milan at

To contact the editor responsible for this story: Celeste Perri at

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