Accor trims back
Accor is to impose €100-million in cost cuts over the next 12 months while taking action to protect its distribution against online travel agents.
The measure is being taken as the French hotel giant faces “sustained deterioration in market conditions” in southern Europe, increased operational costs and more intense competition driven by the evolution of online distribution.
Accor revealed that it is to spend about €30 million a year between now and the end of 2016 to increase online bookings to 50% of the total and to “limit the influence of online travel agents”.
Details of the planned cost cutting remain sketchy but will involve a strategic review and “prioritisation of projects,” as well as a reduction in operating costs for the group and its subsidiaries in Europe.
The ultimate aim is to trim net debt by €2 billion by 2016 and cut annual capital expenditure by as much as €400 million.
Expenditure on new hotels will decline by 2016 to between €100 million and €150 million a year, from €250 million last year. The future focus will be on economy hotels in strategic cities around the world.
This came as the group announced that 2012 operating profits had dropped to €80 million from €248 million the year earlier as revenue inched up by 1.5% to €5.6 billion.
