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Money to be set aside for failing hotels
Accor plans to set aside €100m a year to buy hotels from rivals hit by the global downturn, reports said yesterday (May 4).
The hotel group's chief financial officer Jacques Stern told Reuters that Accor was prepared to wait for deals to emerge as other hoteliers attempt to weather the recession.
Speaking at the Arabian Hotel Investment Conference, Mr Stern predicted acquisition opportunities in the next two years as rivals look to boost their balance sheets.
"In terms of development capex (capital expenditure), we could dedicate an amount of €400m a year to the expansion and within this envelope we will commit around €100m for hotel acquisitions," Mr Stern told Reuters.
Mr Stern also said second quarter revenues from Accor's hotels brands, including Ibis, Novotel, Mercure and Sofitel, would be similar to the previous quarter.
"In Q1 we were down 8% like-for-like growth. We will definitely have some margin decrease. Q2 will be more or less the same," Jacques Stern told Reuters.
In April, Accor posted a 9.6% decline in Q1 sales as demand for rooms fell further. It said it would cut renovation budget further and impose a staff hiring freeze.
Hotels worldwide have been hit hard by the global downturn especially from the corporate market keen to cut travel costs.
Mr Stern said it was too early to predict an end to the industry downturn.