Accor Profit Declines as Terrorism in France Hurts Trave

By Publications Checkout
Accor Profit Declines as Terrorism in France Hurts Trave

Accor, Europe’s largest hotel operator, said first-half profit fell 4 per cent after terrorist attacks in France and economic difficulties in Brazil hurt travel in those countries.

Earnings before interest and taxes dropped to €239 million, the Paris-based owner of the Sofitel and Ibis brands said in a statement on Wednesday. That missed the average estimate of €260 million from four analysts in a Bloomberg survey. The company said full-year profit will be €670 million to €720 million.

"With several of our key markets, including France and Brazil, shaken by crises and violent events, the group showed remarkable resilience in the first half," Chairman and Chief Executive Officer Sebastien Bazin said in the statement.

Since taking up his post in 2013, Bazin has made wide-ranging changes that include cutting costs, adding luxury properties and competing more aggressively online. This year, Accor bought the owner of the upscale Fairmont, Raffles and Swissotel brands for about $2.9 billion in shares and cash, and said it would sell a stake in its HotelInvest unit, which owns properties.

While profit in most of Accor’s markets rose in the first half, a 4.2 percent drop in France - where Accor has a quarter of its rooms - hurt the earnings. Revenue per available room in the country fell 2.2 percent. Revenue globally rose 2 percent to 2.6 billion euros, Accor said.

Profit at Accor’s HotelServices division, which operates and manages hotels, fell after the company spent money on expanding its online offering to compete with websites including Airbnb Inc. Accor said earlier on Wednesday that it’s in talks to buy concierge services platform John Paul in a deal valued at about $150 million.

A series of terrorist attacks in France, including one in the seaside resort of Nice, have left more than 230 dead since the start of last year.

News by Bloomberg ,edited by Hospitality Ireland