French hotel group Accor has said that it is considering splitting its business between its hotel operations and its pre-paid services division after reporting a near-halving of its operating profits in the first half of the year.
The group, which operates the Sofitel and Ibis brands, said it expects to spend around six months considering the proposal after it reported earnings before tax were down by 15% and a net loss of €150m (£132m) compared with a €310m (£272m) profit in the same period last year.
Like-for-like revenues fell at the group’s up-scale and mid-scale hotels by 13.3% and 12.8% respectively, whilst revenues across economy hotels fell by a less severe 8.5%.
The company does not expect any material improvement in the second half of the year but despite this will continue to push ahead with its expansion plans.
Its services unit which offers employee benefits, vouchers and expense management, has been less affected by the recession than hotels, with revenues and margins up.
Consequently the board of directors has approved a recommendation by new chief executive Giles Pelisson to conduct a review of the potential benefits of demerging the two businesses into two separate companies.
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By Gemma Sharkey
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Published by: The Caterer