Accor to earn 50% of its profits from emerging markets by 2016

By Peter Ruddick

- Last updated on GMT

Related tags: Accor, Investment, Hotel

Global hotel operator Accor hopes 50 per cent of its profits will come from emerging markets by 2016
Global hotel operator Accor hopes 50 per cent of its profits will come from emerging markets by 2016
Global hotel operator Accor has revealed it has set itself a target of earning 50 per cent of its profits from venues in emerging markets by 2016.

Announcing its 2012 financial results, the France-based company said like-for-like revenue had grown in the twelve-month period, rising by 2.7 per cent from the previous year to nearly £5bn (€5.65bn). 

Like-for-like operating profits grew by 4.1 per cent in 2012.

The strong performance was driven by rising room rates, the disposal of the Motel 6 business and by rebranding more than 1,500 hotels as part of the Ibis megabrand programme​ - a programme that last week saw the economy concept named the leading hotel brand in Europe.

Emerging markets

The Ibis and Novotel operator revealed 2012 had been another record year for expansion with more than 38,000 rooms opened in 266 hotels, 85 per cent of which were under management or franchise agreements.

The statistics fit with Accor's previously announced target of directly owning just 20 per cent of its portfolio by 2016.

However, the firm today revealed a new ambition for three years’ time - that 50 per cent of its EBIT (Earnings before interest and taxes) would come from emerging markets such as those in Asia and Latin America. In 2011 just 15 per cent of EBIT came from hotels in these newer markets.

"This process will involve consolidating the group’s existing leadership in emerging markets, restructuring the portfolio in Europe to focus on a majority of management and franchise contracts, and strengthening the group’s expertise and accountability," a statement released by the company said.

In Europe, Accor's new plan will see it restructure a number of venues to reduce its debt.

Economy

Backing up previous reports​ detailing the strength of Accor's economy hotels in the UK in particular, the operator today said performance had been strong in its economy venues and stable in its upscale and midscale brands - Mercure, MGallery and Sofitel.

The company also announced it was planning to invest significant funds in increasing direct online bookings and limiting the influence of online travel agents

Accor has already confirmed it will open at least 30,000 rooms per year between now and 2016.

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