French hotel group Accor has reported that sales fell in the first quarter of 2013 due to a decline in Southern European markets.
On a like for like basis revenue was down 0.1% to £1,050m due to a fall in the budget sector in Southern Europe and the negative affect on the Euro of the Brazilian real and the Australian dollar.
Revenue in the upscale and mid-market rose, with demand still strong in key European cities.
Accor said in a statement that it expected trading to remain flat into the second quarter "given the lack of any observable shift in business at this stage".
Though sales in Europe make up the majority of its revenue, Accor said that sales in emerging markets had increased their contribution to 45% of the total with a strong performance in Africa and the Middle East. It added that fees from managed and franchised hotels grew 18.2% to £114m.
Some 32 hotels were opened in the period, amounting to 4,628 rooms, 85% of which are under management and franchise agreements.
Accor said that the performance was expected as part of the group's strategic transformation. It added: "Revenue held stable over the period despite high prior-year comparatives and the impact of 29 February 2012. This performance was led by solid resilience in the upscale segment, sustained demand in key cities and the continued transformation of Accor's business model, as manifested in the increased gross revenue and in management and franchise fees."