* Difficulties in France expected to continue in Q2
* Q1 sales 1.135 bln euros, up 2.1 pct on like-for-like
* Robust demand in other markets
(Adds details, CFO comment)
By Dominique Vidalon
PARIS, April 17 Europe's largest hotel group
Accor said on Thursday that difficulties in its core
French market that held back first-quarter revenue growth would
remain in the second quarter.
The world's fourth-largest hotel group behind
InterContinental, Marriott and Starwood
is undergoing a reorganisation instigated by new CEO Sebastien
Bazin, but has been beset by a variety of problems in its home
market, which generates 35 percent of group sales.
France's value added tax (VAT) rate rose to 10 percent from
7 percent at the start of the year, increasing Accor's room
prices, while poor weather also discouraged short-stay leisure
guests, it said
The group, however, said that it would benefit from a solid
trading environment in its other markets.
"First-quarter trends remain generally robust, with rising
demand in almost every country, signs of recovery in Southern
Europe and firm hotel pricing power, with the exception of
France, Spain and Italy," it said.
Revenue in the first three months of the year reached 1.135
billion euros ($1.57 billion), a 2.1 percent rise on a
like-for-like basis, which excludes currency fluctuations,
acquisitions and divestitures.
This marked a slowdown from like-for-like growth of 3.4
percent in the fourth quarter of 2013.
On a reported basis, revenue declined 5.5 percent because of
weaker currencies in emerging markets, notably in Brazil.
Chief Financial Officer Sophe Stabile told a conference call
that France would continue to feel the negative VAT effect in
the second quarter, while there would also be an unfavourable
holiday calendar in April and May.
There would also be no Le Bourget airshow near Paris in
June, which is traditionally a boost for a group that draws 70
percent of its clients from the business world.
Accor said it opened 4,449 new rooms during the quarter, 50
percent of which were in emerging markets.
Shares in Accor have gained about 3 percent this year,
outperforming a 2.5 percent rise in the CAC-40 index of French
Accor shares trade at 20 times forward earnings, in line
with InterContinental but below 25.92 times for Starwood and
22.35 times for Marriott.
($1 = 0.7228 Euros)
(Editing by Maya Nikolaeva and David Goodman)