Jean-Marc Espalioux, ceo of Accor, the fourth largest hotel group in the world, is to leave the company before his contract expires next January.
Mr Espalioux who is 53, has held the post since 1997 and saw the company through the worldwide slump in the hotel business after 9/11.
The public announcement of his pending departure, following weeks of rumour in the French press, comes as Accor announced a 22.8% rise in its pre-tax operating profit for the first half of 2005.
A statement by the company said that Mr Espalioux had not asked the management board of which he is chairman to renew his contract.
The statement said: “After modernising the group, he undertook in the difficult years following September 11, 2001, the necessary measures to put Accor back on the road to earnings growth and improved profitability while pursuing the group's expansion.”
However the French press has said that Accor's founders, Paul Dubrule and Gerard Pelisson had become convinced that a new ceo was needed to move the hotel group, which has 4000 properties, forward.
A headhunter was appointed to find a suitable successor but with some eight names put forward for consideration, two favourites emerged, Henri Giscard d'Estaing and Gilles Pelisson.
Mr Giscard d'Estaing is the son of a former French president and currently ceo of Club Mediterranee in which Accor has a 29% stake.
Mr Pelisson, nephew of the co-founder, is ceo of Bouygues Telecom, one of the largest mobile phone companies in France. His company is reported as saying Mr Pelisson has no interest in the Accor job.
The coming change at the top is understood to relate to a change in strategy at Accor with speculation that the group which runs the upmarket Sofitel brand is considering selling two of its US budget brands Red Roof Inns and Motel 6.
The group said its operating profit for the first half of 2005 had risen to 230m while its net income, group share rose 143% to 156m, principally from the sale of 128 hotels.
It said it was aiming for a full year pre-tax operating profit of between 590m and 610m, a 15-20% rise on 2004.