2014 Registration Document and Annual Financial Report - page 18

Corporate Presentation
Strategic vision and outlook
After very quickly getting its two business lines, HotelServices and
HotelInvest, up and running, Accor initiated an in-depth transformation
of its business model, which began to deliver benefits in 2014. In a
mixed economic environment, we consolidated our leadership in key
markets and generated excellent results, with record performances
in many operational and financial areas.
1. HotelInvest’s transformation
HotelInvest’s main challenges
are to:
Strengthen its position as the
leading hotel investor
in the
economy and midscale segments
with strategic
positions in emerging markets.
cash flow generation
and reduce earnings volatility,
particularly by reducing the number of lease contracts. As part of
this process, certain hotels have been earmarked for restructuring
and lease contracts will not be systematically renewed when
they expire. In addition, hotel development will no longer take
place via lease contracts, except for contracts on which Accor
has already made a commitment.
Manage and rationalize the asset portfolio, with a focus on
through the strategic allocation of capital expenditure.
Support the Group’s growth strategy, by
holding a selective
portfolio of profitable hotel property assets.
HotelInvest will retain the vast majority of owned hotels, limiting
property sales to hotels that are performing well below average.
HotelInvest is also responsible for allocating maintenance and
development expenditure and may decide to acquire other hotel
properties to drive the creation of greater value.
To address these challenges, and particularly to reduce the number
of lease contracts, Accor carried out a large number of restructuring
transactions on behalf of HotelInvest in 2014, concerning both hotel
asset portfolios and individual properties.
In May, two portfolios of hotels previously operated under variable
leases were purchased, one comprising 86 units in Germany and
the Netherlands from Moor Park and the other comprising 11
properties in Switzerland from Axa Real Estate. In August, these
transactions were followed by the acquisition of 13 hotels in the
United Kingdom fromTritax. In all, an aggregate €980 million was
invested in these acquisitions. At the same time, 30 leased and 18
owned hotels were restructured during the year.
2. Two strategic partnerships
with regional leaders
Stronger partnership with Orbis
As part of the reorganization of our business in Central and Eastern
Europe, operations in Poland, Hungary, the Czech Republic,
Slovakia, Romania, Bulgaria and Macedonia were transferred to our
majority-owned subsidiary Orbis, the leader in the Polish hospitality
market. It will now develop Accor hotel banners in the region by
exploiting a master license for all of our brands. Orbis also purchased
our operating subsidiaries in these countries, covering 38 hotels
and eight new properties in the pipeline, of which 11 are owned,
17 leased, 11 managed under contract and seven franchised. Total
proceeds from the transaction amounted to €142 million.
Strategic alliance with Huazhu (China Lodging)
On December 14, a long-term, strategic alliance was announced
with Huazhu Hotels Group (China Lodging Group) to create the
most prominent and diversified hotel company in China, with more
than 2,000 hotels, a diversified brand portfolio and the industry’s
strongest pipeline in the country.
This major alliance, which is expected to close in 2015, will accelerate
both partners’ expansion in what is today one of the largest and
fastest-growing domestic travel markets and the world’s largest
outbound travel market. The objective of the alliance is to bring
together the best of both partners, combining Accor’s internationally
recognized brands and powerful global distribution network with
the extensive coverage, local reputation and strong development
capability of Huazhu Hotels Group in China. Together the partners
have a pipeline of more than 500 hotels in the country.The alliance
is expected to accelerate development to new levels and drive very
fast growth for Accor’s brands in China.
Registration Document 2014
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