Terror attacks will cut Accor profits

French-owned hotel giant Accor is predicting a €100m drop in profits this year as a result of 11 September.

Before 11 September the company had predicted an €850m pre-tax profit for 2001. But now, according to Michael Flaxman, managing director of UK hotels, the estimate is €700-750, the same as 2000.

Flaxman, speaking at the Hotel Report Special Crisis Seminar today in London, said Sofitel and Accor's other business and leisure brands had been the most severely affected.

Sofitel will lose 20% of its sales for the year. Accor, which has 76,000 bedrooms worldwide, has reduced its spending on renovations by one-third and is reviewing its investment programme.

Following the attacks it froze all US investment - "the only immediate action we took", Flaxman said.

But he described the long-term trend as "favourable" and predicted growth in the middle and economy markets.

"This crisis will confirm the competitive edge of truly global groups," Flaxman claimed.