Accor steps up transformation, savings in tough Europe
PARIS (Reuters) - Accor, Europe's largest hotelier, said on Wednesday it would seek cost cuts to cope with a tough economic climate in Southern Europe while accelerating its shift to a less cash-consuming "asset light" business model.
The world's fourth-largest player also said it would hike its 2012 dividend by 17 percent on the back of higher operating profits, as robust emerging markets made up for softer results in Europe.
Accor, which trails InterContinental (IHG.L), Marriott MAR.N and Starwood Hotels (HOT.N), will seek savings of 100 million euros between 2013 and 2014 to respond to a "deteriorating" situation in austerity-hit southern Europe, its Chief Executive Denis Hennequin told a conference call.
Accor, which makes 70 percent of its sales in Europe, is more exposed than peers to the region's woes.
To reduce that exposure, Accor has been accelerating its growth in emerging markets and operating more hotels under contracts rather than owning them.
Accor said on Wednesday that this strategy would involve the restructuring of 800 hotels and cut net debt by 2 billion euros by 2016.
The company, whose brands range from the luxury Sofitel chain to budget Ibis, also set a target of generating 50 percent of its earnings before interest and taxes EBIT.L from emerging markets by 2016 against a current 15 percent.
Accor said 2012 earnings before interest and tax EBIT.L reached 526 million euros, against the company's outlook of 510-530 million and exactly in line with analysts' average estimate.
This represented a like-for-like rise of 3 percent from 515 million euros in 2011, restated for the sale of U.S. budget hotel chain Motel 6. (Reporting by Dominique Vidalon; Editing by James Regan and Christian Plumb)