Hotel chain Accor to double Middle East presence

Europe’s biggest hotel group says room revenues have been hit by Arab Spring unrest
Hotel chain Accor to double Middle East presence
Denis Hennequin, chairman of Accor
By Claire Ferris-Lay
Sun 23 Oct 2011 01:10 PM

Accor, Europe’s largest hotel group, plans to more than double its presence in the Middle East by 2015, its chairman and CEO told Arabian Business.

The French company has lost significant revenue per available room (revPAR) in Egypt but expects it to pick up after the elections and has put four of its hotels on hold in Syria amid the political turmoil, said Denis Hennequin.

“We have 23 secured projects [in the region] but our ambition goes beyond those 23. We should double the number of hotels we have by 2015 so that’s the 23 plus the 55 we already have, which gives us 78. But 2015 is not yet here, so there is still room for improving that,” he said.

The operator plans to double the number of Ibis hotels in the region and sees growth opportunities for Pullman and Sofitel, said Hennequin. “We already have nine [Ibis hotels] and seven more to come but again I think we can more than double our number by 2015.

“It’s a very large market for Sofitel over here and the same opportunity to grow aggressively. Pullman is a very suitable product for the region so in the mid to long-term I think Pullman has the potential that’s even higher than Sofitel.”

Accor, which operates hotels ranging from the luxury Sofitel chain to the budget Ibis operations, is shifting its focus to fast growing regions including the Middle East, Latin America and Asia Pacific. The firm has 40 percent of its global pipeline in Asia Pacific.

The firm on Oct 18 said third quarter sales increased 2.7 percent as more guests stayed at its economy hotels. Sales reached €1.623bn ($2.22bn) from €1.58bn a year earlier, it said.

Accor said revPAR in its 18 Egyptian hotels remains low. “One of our largest markets [in the region] is Egypt…this one is still suffering a bit. I think until they have those elections things are still going to be a little bit [difficult]. Cairo to other parts of Egypt we’ve lost significant revPAR,” he said.

Four hotels in Syria have been delayed until further notice, he added.

Accor said it had yet to see demand for hotel rooms reflect signs of an economic slowdown and is optimistic about growth in 2012 in Europe.

“If the Euro weakens….it will be a more attractive region for the rest of the world. We have the Olympics coming in London and a very favourable calendar for events in Germany. There will be some winds that we are going to be facing and we’re going to have some winds in our back so at the end of the day we are optimistic,” said Hennequin.

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