Close

Cart

Total $0.00

Checkout
(Paris) November 27, 2013  - A new strategy to enhance growth and sustained value creation

--Redefinition of the Group's business model around its 2 core missions, for maximum operational performance & sustainable growth 

  • Hotel Services: a hotel operator and brand franchisor that will be fee-oriented and P&L driven.  
  • HotelInvest: a hotel owner and investor that will be yield-oriented and balance sheet driven. 

-- A value-oriented, disciplined hotel ownership strategy, entailing notably the end of expansion through leases, and no further disposals of owned hotels,unless they are structurally under performing assets.

-- A new organization built by geography, consistent in all markets, at lower running costs.The brands will be grouped by segment.

-- A new Executive Committee with 10 members, including the 5 regional Heads of operations.

Sébastien Bazin, Chairman and CEO of Accor, commented:  "Accor is a strong and unique group poised to derive benefit from rich opportunities. However, it deserves a much higher ambition to create sustained value.It requires the in-depth, rapid transformation of both its business model and its organization, as well as a clear and long term vision, and to stay the course. With this new strategy,our aim is to unlock Accor's full potential through its two core activities and maximize value creation for shareholders." 

A new model, recognizing two mutually reinforcing core competencies 

With this new organization, Accor re-emphasizes the group's two core competencies, i.e. asset management and services to owners, by separating their functions, their missions and their targets in order to build a better performing business model. 

All 1,400 hotels of HotelInvest will be operated by HotelServices through management contracts. Each business unit will have its own reporting,with separate P&L, Cash-Flow statement and balance sheet.They will report to single Executive Committee. The Group will retain key central functions including Finance, HR, Legal and Communication. 

HotelServices: hotel operator & brand franchisor 

HotelServices is pure fee-oriented hotel operator & brand franchisor, that boasts with strong brands, a winning path in distribution, and robust development. It will comprise the Management & Franchise, Sales & Marketing, distribution and IT departments. 

It will operate nearly 3,600 hotels and 460,000 rooms worldwide under 14 brands world wide across all segments. Its room portfolio will consist of 46% in the economy segment (ibis, ibisStyles, ibisbudget, Adagio Access, hotelF1), 40% in the midscale segment (Novotel, Mercure, Adagio), and 14% on the Luxury/upscale  segment (Sofitel, Pullman, MGallery, GrandMercure, TheSebel). 

This high margin and cash generative business will be driven by three business priorities:

--Maximize fee generation, by adjusting our service offer to better meet partners  expectations, focusing on fee generation rather than contract wins, and managing costs to optimize results for both our partners and Accor.

--Accelerate in CRM, Loyalty and digital services. Resources will be allocated in priority to program & system development, to increase Le Club Accor hotels loyalty members' contribution to hotel revenues and to foster Revenue Management agility, in order to maximize the top-line, with a better use of OTAs as additional revenue growth partners.

--Implement a segmented strategy to strengthen brands 

  • Luxury / Upscale: a service excellence and flagship strategy in key gateways to increase brand equity
  • Midscale: a focus on innovation to enhance brand offer & differentiation
  • Economy / Budget: capitalize on ibis megabrand success to secure leadership & scale

HotelServices will communicate on selected KPIs to reflect its 100% asset-light profile: system growth, RevPAR and Gross revenue, GOP and drop-through, Net Promoter Score (guest satisfaction), Fee revenue, EBITDA and EBIT margins, as well as Free Cash Flow. 

Based on 2012 pro forma figures, Hotel Services' revenue stands at €1,119m and EBITDA at €387m. 

HotelInvest: a hotel owner and investor 

HotelInvest will be a hotel owner and investor, and will comprise the Owned &Leased and shared service activities. It will start with a portfolio of c.1,400 hotels of which nearly 300 are in full ownership. More than 85% of this portfolio is located in Europe and more than 95% is in the economy / budget and midscale segments.   Owned hotels account for about 50% of the Net Operating Income at inception, and the objective is to increase this share to over 75%.

HotelInvest's strategy will be value-oriented and based on four pillars:       

  • Build the first hotel investor in the economy & midscale segments in Europe with strategic  positions in emerging countries, and consolidate the owned hotel base. Hence no further  disposals of owned hotels unless they are structurally under performing assets.   
  • Focus on delivering cash-flow and reducing volatility, notably via the reduction of non- performing leases based on three criteria (GOP margin before fees, Net Operating Income and Location) and with the ability to terminate leases.
  • Manage & rationalize the asset portfolio with an active approach towards to creating value through strategic capex allocation.
  • Support AccorGroup development strategy through selective and profitable ownership, and stop the development through lease, with no new contracts signed from now on (except those already committed).

The above-mentioned strategy will  be  deployed on  a  hotel-by-hotel basis  depending on  the ownership structure of each hotel. 

HotelInvest will communicate on its own selected KPIs to reflect its long-term owner ship profile: Portfolio arbitrage, Capex allocation, Net Operating Income, Development Capex, Net Asset Value, ROCE and IRR for new projects and debt ratios. 

Based on 2012 pro forma figures, HotelInvest revenue stands at €5,122m and EBITDA at €531m. 

Towards a leaner & more efficient organization

The group will move from the current hybrid set-up to a geography -based organization with consistent accountability in all the regions. This organization structure will enable  decision-making that is closer to the frontline at lower running costs. The brands will be clustered in three segments, "Luxury/Upscale", "Midscale" and "Economy/Budget" with synergies in support functions across the brands. 

In addition, Sofitel will now be able to contribute its expertise to the "Luxury/Upscale" segment  which marketing functions will be relocated in Asia. 

Accor will be managed by a new 10-member Executive Committee that will include the five regional heads of  operations, and Sven Boinet, who joins as Group Managing Director, Chief Transformation Officer, Human Resources and Legal Affairs. The new management team will impulse a new operating mode within the group, to enhance clarity, agility and accountability in the decision process. 

In a nutshell, Accor will now rely on:

  • A clear & long-term vision supported by a more simple & agile organization
  • Specific and dedicated KPIs to follow and monitor the execution of the strategy
  • One team, two complementary missions with clearly identified skills       
  • A structure built to maximize operating performance and create value for  shareholders and all stakeholders.

Tags: accor

About Accor

Accor, the world's leading hotel operator and market leader in Europe, is present in 92 countries with more than 3,500 hotels and 450,000 rooms. Accor's broad portfolio of hotel brands - Sofitel, Pullman, MGallery, Grand Mercure, Novotel, Suite Novotel, Mercure, Adagio, ibis, ibis Styles, ibis budget and hotelF1 - provide an extensive offer from luxury to budget. With more than 160,000 employees in Accor brand hotels worldwide, the Group offers its clients and partners 45 years of know-how and expertise.www.accor.com

Contact: Media Contacts - Charlotte Bourgeois-Cleary Vice President, Global Media Relations or Elodie Woillez

+33(0)145388484 or +33(0)145388708

Contact: Investor and Analyst Contact - Sébastien Valentin, Senior Vice President, Investor Relations and Financial Communication

+33(0)145388625

Related News

Aramark Completes Purchase of Avendra for $1,350 Million

Accor: What Will be the Hotel Room of the Future?

AccorHotels Enters Strategic JV Partnership with Rixos Hotels with Focus on Global Development in the Luxury Resort Segment

BHG and AccorHotels Form Partnership for Accor to Manage 26 Hotels in Brazil

Nominee for “2016 Hospitality Leader of the Year”

AccorHotels Appoints Thibault Viort as Chief Disruption and Growth Officer

Good News for the European Business Travel Market

AccorHotels Partners with Hasabi Real Estate to Operate 700-Room Mixed-Use Development In Dubai's Garhoud Area

AccorHotels Partners with TrustYou to Power Its Voice of the Guest Program

TrustYou Study with AccorHotels Shows Effect of TripAdvisor Reviews on Bookings

Daniel Schlaipfer, Executive Chef for Sofitel Lisbon Liberdade: “Cooking is like haute-couture”

AccorHotels Names Sophie Stabile as Chief Executive Officer HotelServices France

AccorHotels' Appointments within HotelServices in North, Central and South America

Accor Becomes AccorHotels as Part of Transformation

Accor Enters Sale & Franchise-Back of Seven Hotels in United Kingdom and Ireland for $58.9 million

Accor Signs Management Contract with Gran Caribe for 581-room Pullman Cayo Coco in Cuba

Accor Sells 29 Hotels in Germany and the Netherlands Under a $259M Sales & Franchise-back Agreement

Accor Names Balendra Nagesvaran as Vice President of Operations Luxury and Upscale Brands

Cyril Kovarsky Joins Accor as Senior Vice President of Global Sales

Accor Sells Zurich MGallery for $62.6 Million, Retains Management; Buyer Plans $26 M Renovation

All News »

Please login or register to post a comment.