AccorHotels profits rise after Fairmont Raffles acquisition

Even though the French hospitality group AccorHotels was facing an environment filled with many challenges, its revenue managed to rise .9 percent in 2016.

The challenges that AccorHotels was facing including a decreasing rate of tourism in the wake of terror attacks in Paris, which drove a reduction in revenue of 2.8 percent across France, as well as the decreasing value of the British pound, which yielded a negative drop of 136 million euros, equivalent to roughly $143.5 million. These are, to be sure, no easy challenges for any global hospitality industry operator to face.

AccorHotels, however, has stayed nimble, diversifying its business holdings by making acquisitions within the global hospitality space, as well as by looking outside, past the staid ides of traditional hotels, vacations rentals and concierge companies. Industry experts say AccorHotels has thrived due to record levels of EBIT and numbers of new hotel rooms opened. Leaving their tested comfort area and exploring new markets and services has served the company well, as has consolidating their leadership positions, which has enabled the company to open new horizons for its clients.

A key move for AccorHotels was the July 2016 acquisition of FRHI Hotels and Resorts, which owns the Fairmont, Raffles and Swissôtel brands, a transaction with a price tag of $2.7 billion. This move allowed AccorHotels to combine its own global platform and digital expertise with FRHI's skilled operating and marketing of its luxury hotels. As with all great strategic mergers, this partnership has brought the parties involved mutual benefits. After this merger, AccorHotels went on to create a global luxury/upscale division within its own company, and that division was then helmed by FRHI's Chris Cahill.

Another key to sustained success for AccorHotels in the wake of a challenging marketplace has been the companies sustained aggressive expansion. In 2016, AccorHotels set development records, adding more than 81,000 new rooms throughout a total of 347 hotels, 117 of which were within the Fairmont Raffles Hotel International branding. Throughout 2016, AccorHotels also bought all of onefinestay, a thriving entity in the luxury serviced home rentals market. Another bold and savvy move by AccorHotels was its decision to acquire 79 percent of John Paul, a celebrated concierge service.

These moves, however, did not end with 2016. In fact, this young year has already seen AccorHotels moving to repeat last year's success. In February, the company entered into exclusive talks with Travel Keys, a private villa rental service.

To put this all in perspective, AccorHotels achieved a total revenue in 2016 of about $5.9 billion.

Media Contact

Lennart Kooy

associate partner TOPHOTELMEDIA [email protected]