Bloomberg News

Accor’s Hennequin Sees Slowing 2012 Growth, Cautious Outlook

October 07, 2011

(Updates with closing share price in sixth paragraph.)

Oct. 7 (Bloomberg) -- Accor SA Chief Executive Officer Denis Hennequin forecast slowing growth at Europe’s largest hotel company as consumers and businesses reduce spending on lodging next year.

“In 2012 we expect a slowdown but still positive growth,” the CEO said in an interview yesterday in London. “I’m cautious, not pessimistic.” The owner of Novotel and Sofitel brands may report a 3.6 percent increase in 2011 sales and 2.5 percent in 2012, according to 16 analysts surveyed by Bloomberg.

Paris-based Accor gets about 73 percent of revenue in Europe. Goldman Sachs Group Inc. cut its 2012 growth forecast for the euro-area economy to 0.1 percent from an earlier prediction of 1.3 percent this week and said France and Germany may enter a recession.

Next year won’t be a repeat of 2009, when Accor reported a loss of 282 million euros ($381 million), Hennequin said, as the London Olympics and trade fairs in Germany boost demand. Corporations have cleaned up their balance sheets and Accor will end this year with almost no debt, he said.

“There’s a disconnect between market fear and the real robustness of the economy,” the CEO said. “We have seen no reaction from consumers. People always want to take a break.”

Shares Drop

Accor shares fell 7 cents, or 0.3 percent, to 21.37 euros at the 5:35 p.m. close in Paris. The stock has dropped 36 percent this year, giving the company a market value of 4.9 billion euros. That’s more than twice the decline of InterContinental Hotels Group Plc, the world’s largest hotel group by rooms.

Since joining Accor from McDonald’s Corp. in January, Hennequin has sold catering and casino businesses to focus on hotels and is combining three brands under the Ibis umbrella.

Hennequin repeated he wants to reduce exposure in the U.S., where Accor owns the Motel 6 chain, and would consider selling individual properties or groups of hotels.

“It is premature to say we will definitely sell the whole thing at once,” he said. “In the mid-term we will not keep capital invested in the U.S. with Motel 6.”

Accor may target “limited acquisitions” and would consider buying some of Groupe du Louvre’s luxury hotels if they could be converted to Accor brands, Hennequin said.

--Editors: Sara Marley, Paul Jarvis

To contact the reporter on this story: Armorel Kenna in Milan at akenna@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net


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