Accor Profit Misses Estimates as Hotelier Shifts StrategyDalia Fahmy
Accor SA, Europe’s largest hotel operator, said first-half profit fell 6.6 percent as the company began a three-year change of strategy that includes property sales and cost cutting.
Earnings before interest and taxes slid to 198 million euros ($265 million) from 212 million euros a year earlier, the Paris-based company said today in a statement. That’s less than 212 million euros, the average of 10 analyst estimates compiled by Bloomberg. The owner of the Ibis, Novotel and Sofitel brands, expects full-year profit to be 510 million euros to 530 million euros, compared with 526 million euros in 2012.
Accor is in the first year of a three-year reorganization that includes increasing its focus on 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 the current 58 percent, with the rest operated under franchise or management contracts.
Yesterday, the company said Sebastien Bazin, head of European investing at Accor shareholder Colony Capital LLC, will take over as chairman and chief executive officer.
Accor fell 4.4 percent in Paris trading to close at 27.52 euros. The stock has gained 3.1 percent this year, making it the worst performer on the Bloomberg Europe 500 Travel and Leisure Index.
Revenue fell 0.9 percent from a year ago to 2.69 billion euros after the company added 9,940 rooms. Most of the rooms are operated but not owned by the company.
In February, Accor said it plans to open 30,000 rooms a year through 2016. At the end of that period, Accor expects to operate 40 percent of its rooms under franchise agreements, and 40 percent under management contracts.
The company last year sold its chain of more than 1,100 Motel 6 budget hotels in North America to Blackstone Group LP for $1.9 billion. Accor’s first-half net income was 34 million euros. The company posted a 532 million-euro net loss a year earlier on the effects of the hotel chain sale.
Accor has 450,000 rooms at more than 3,500 hotels in 92 countries, according to its website.