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AccorHotels upbeat on 2017 profit target after third quarter sales
October 19, 2017 / 4:28 PM / in a month

AccorHotels upbeat on 2017 profit target after third quarter sales

PARIS (Reuters) - AccorHotels (ACCP.PA), Europe’s biggest hotel group, on Thursday gave a rosier outlook, saying its 2017 operating profit would be at the upper end of a 460 million to 480 million euros range forecast in July.

FILE PHOTO: The logo of the French hotel operator AccorHotels group is pictured on their headquarters in Issy-les-Moulineaux as the Eiffel tower is seen in the background, outside Paris, France, February 19, 2017. REUTERS/Christian Hartmann/File Photo

The French company, which runs high-end chains such as Raffles and Sofitel as well as budget brands such as Ibis, said third-quarter sales reached 504 million euros ($596.9 million), up 6.4 percent on a like-for like basis.

Robust demand in most markets, including France, Britain and Germany, outpaced continued weakness in South America, where revenue fell 15.3 percent across the region.

Chief Financial Officer Jean-Jacques Morin said talks were still underway to sell investors a stake in the AccorInvest property business, in a bid to raise cash to speed up growth.

A deal was expected to be sealed by the end of the year, he said.

The French company, which runs more than 4,000 hotels worldwide, has been expanding in the luxury end of the market.

It has invested in emerging countries and new areas such as concierge services, partly in an effort to see off competition from flat-sharing websites such as Airbnb.

Earlier this month AccorHotels clinched a deal to buy Mantra Group Ltd (MTR.AX) for A$1.18 billion ($920 million) to create the biggest hotel group in Australia.

In France, where the tourism industry slowed after a series of deadly attacks last year, the recovery continued with average revenue per hotel room (RevPAR), a closely watched performance measure, up 5 percent in the quarter. In Paris alone, RevPAR rose 6.6 percent, driven by a return of foreign tourists.

The situation in Brazil, which is emerging from recession, remained difficult, with RevPAR falling 17 percent.

But AccorHotels said business there appeared to have reached the low point of the cycle, with the region’s occupancy rate rising for the first time in three years.

The group said it expected trends seen since the start of the year to continue in most markets until the end of the year.

Reporting by Dominique Vidalon, Editing by Sarah White

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