Accor confident for fourth quarter, keeps targets

PARIS Thu Oct 17, 2013 1:13pm EDT

An illustration picture shows loyalty guest cards of Europe's largest hotel group Accor displayed on a desk in Paris August 28, 2013. REUTERS/Jacky Naegelen

An illustration picture shows loyalty guest cards of Europe's largest hotel group Accor displayed on a desk in Paris August 28, 2013.

Credit: Reuters/Jacky Naegelen

PARIS (Reuters) - Accor (ACCP.PA), Europe's largest hotel group by sales, said revenue growth accelerated in the third quarter as demand for rooms in budget hotels showed further signs of recovery.

The French company, with nearly 3,500 hotels ranging from the luxury Sofitel to the budget Ibis chain, said fourth-quarter business trends would be similar to the third quarter and kept its full-year outlook.

"Accor remains confident for the last part of the year, thanks to solid demand in Europe and the growth dynamic in emerging markets," Chief Financial Officer Sophie Stabile told journalists.

Booking levels for the month of October were "good", she added.

Accor, which competes with InterContinental (IHG.L), Marriott MAR.N and Starwood (HOT.N), said revenue reached 1.44 billion euros ($1.97 billion), a like-for-like rise of 3.8 percent, following a rise of 3.3 percent in the second quarter

The group, which has been increasingly managing hotels rather than owning them to cut debt and save cash, also benefited in the quarter from a sharp rise in revenue from management and franchise fees.

Accor said it was still expecting 2013 operating profit of 510 to 530 million euros, versus the 526 million made in 2012.

Revenue in the upscale and midscale hotel segments grew 3.6 percent like-for-like in the quarter, thanks to strong demand from leisure customers during the summer and business customers in September in France, Northern Europe, Asia-Pacific and the Middle-East.

Revenue from economy hotels grew 4.2 percent like-for-like, accelerating from 2.4 pct in the second quarter. All markets contributed to the growth, and particularly Northern Europe.

The first nine months marked further expansion with the opening of 14,100 rooms, 82 percent of which are under management franchise and management contracts, and 52 percent in emerging markets, Accor said.

Accor, which will hold an investor day on November 27, gave no details on the strategy of new Chief Executive Sebastien Bazin, who was appointed in August.

Analysts have said they expect Bazin to speed Accor's shift towards franchising or managing hotels for others rather than owning them and to focus on cost cuts to boost profit margins.

Shares in Accor have gained around 21 percent since the start of 2013, outperforming a 16 percent rise in the CAC-40 index of French blue chips.

(Reporting by Dominique Vidalon; editing by Geert De Clercq)