29 August 2008

Accor plans 75m euro cost cuts

Accor is to make 75 million euros-worth of cost savings over the next two years.

Corporate overheads, organisation of head offices in Latin America and the US, marketing expenditure, purchasing, and new IT projects have all been targeted.

The measures come as the French hotel giant said it anticipated an economic environment Ã¢â¬Åâœthat might remain difficultÃ¢â¬~ in 2009.

The company saw half year net profit reduce by 48% from 596 million euros to 310 million euros.

Operating profit before tax and non-recurring items was 393 million euros, up 16% like-for-like, the company said.

As part of a restructuring, including the sale or non-core assets such as French operator Go Voyages, AccorÃ¢â¬â¢s full-year target is to report profit before tax and non-recurring items of between 910 million euros and 930 million euros, reflecting a 16% increase in profit.

Like-for-like RevPAR in July for in upscale and midscale hotels in Europe rose by 3%, with increases of 4.2% in France, 4.7% in Germany and 0.4% in the rest of Europe.

In economy hotels in Europe, like-for-like RevPAR was up 1.7% overall, rising 3.1% in France, 1% in Germany, and 0.4% in the rest of Europe.

In economy hotels in the US, RevPAR was down 3.0% in July, in line with the market, Accor said.

by Phil Davies