Accor reports 11.4% drop in hotel revenue

Outlook still "extremely depressed"

Accor has reported an 11.4% like for like drop in its hotel business for the first six months of 2009.

The Paris-based chain said that revenue at its up- and mid-market properties like Sofitel and Novotel had dropped 13.3%.

At the budget end, where it has brands including Ibis and F1, Accor said business was down 7.3%.

Overall, including its service businesses, Accor said its revenue in the six months had fallen 8.1% compared with the same period a year ago.

In a statement announcing the results, Accor spoke of a "severely deteriorated economic environment."

Accor said it its hotel revenue for the six months fell €2,534m despite an expansion policy which saw a 4.4% growth including 12,100 new rooms.

Second quarter revenue from its hotels dropped by 13.7% like for like to €1,351m.

The group said the fall in up- and mid-market business in France was mainly due to the business segment which dropped 12.6% in Q1 and 16.6% in Q2.

"Despite the Paris Air Show in June, business outside Paris held up better than in the capital, with revPAR down 17.2% in Paris versus 9.1% in the rest of the country," Accor said.

In Germany revenue fell by 11.6%, including 1.6% in Q1 and 19.6% in Q2.

UK figures showed a drop of 10.6% in the first six months including a fall of 8.9% in Q1 and 11.4% in Q2.

"Business in London fared better than the rest of the country, as the weak pound attracted more tourists, leading to a 10.4% rise in Leisure segment revenue.

"This helped to limit the decline in revPAR to 7.2% in the capital versus 19.2% for the rest of the country," it said.

But Accor said its budget hotels fared better although revenue was down by 7.3% to €781m.

Accor said that in France the hotels "demonstrated strong resilience in the depressed economic environment" with like-for-like revenue down just 2.7% for the period, including 3.2% in the first quarter and 2.3% in the second.

In Germany, first-half revenue fell 9.8% like-for-like while its economy hotels in the US showed a 12.8% drop in first half revenue to €281m.

Accor said its hotel business had been "badly hit by the economic environment and has not yet showed signs of stabilising in most countries."

It added: "The Group is continuing to adjust to this environment by cutting costs and scaling back capital expenditure in 2009 and 2010."

www.accor.com

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