Accor Seeking $4.1 Billion From Sale Leaseback or Manageback of 535 Hotels

Yahoo! News / AFP - September 6, 2006

French hotel group Accor has said it planned to sell (and leaseback or manageback) 535 hotels in the next few years but would create as many as 200,000 new rooms, half of them in emerging markets, under a new strategic plan for the group.

The sale of the hotel real estate is to take place by 2008 and is expected to raise 3.2 billion euros ($4.1 billion dollars), including 1.6 billion euros in cash. Accor has sold 261 hotels in the last 18 months for 1.6 billion euros.

Accor, which owns hotel chains Sofitel, Novotel and Ibis, intends to add the 200,000 new rooms to its hotel portfolio by 2010. Most of them will be opened though franchise and management agreements.

"The expansion plan is focused on emerging markets in the Middle East, in Latin America and in the BRICs -- Brazil, Russia, India and China, which represent 50 percent of openings," the group said in a release Wednesday.

Fifty-one percent of the new rooms are to be in economy class and 34 percent in the mid-range category.

The expansion plan "represents an investment of 2.5 billion euros between 2006 and 2010. Half of the investments will be committed in Europe and 44 percent in emerging markets".

It also announced a strategic review of its Red Roof Inn motel business in the US, which is an underperforming 336-strong chain of hotels present in the Midwest, the East Coast, and the South.

The announcement of a strategic review by a company often foreshadows a sale or spin-off. Accor said that a decision about its possible divestment would be taken in the next few months. Sphere: Related Content