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AccorHotels seeks financial partners to fund global growth

13 July 2016 by
AccorHotels seeks financial partners to fund global growth

AccorHotels is seeking a "substantial" injection of cash from third-party investors to enable it to fuel the expansion of what has always been regarded as a French business into a global hospitality company.

Two-and-a-half years after the group - comprising more than 4,000 hotels in 95 countries - was divided into ownership and operating divisions through HotelInvest and HotelsServices respectively, the company believes the opportunities for growth will be increased by obtaining investment from pension funds and other institutional organisations.

The decision to create a dedicated subsidiary for AccorHotels' HotelInvest operations, creating a legal structure that will eventually enable third-party investors to hold the majority of its capital, was taken by the group's board of directors yesterday. It has not yet been confirmed what proportion of equity will eventually held by outside investors.

A meeting of the shareholders of the group also approved the acquisition of FHRI Holdings (FRHI), the parent company of the three luxury brands, Fairmont, Raffles and Swissotel. The portfolio of 155 properties includes two UK hotels: the Savoy in London and Fairmont St Andrews on the east coast of Scotland.

Steven Daines, chief executive of HotelServices UK, Ireland, Benelux, Switzerland, Russia and CIS, told The Caterer

"We are confident that we will secure a number of investors, who will be attracted by our improved operating performance," he said. "New partners will make the business stronger and fuel our future expansion."

Daines was, in particular, referring to the gross asset value of HotelInvest, which has increased from €5.5b (£4.6b) at the time of its inception in 2013 to €7b (£5.8b ) in 2015.

"Being a global hotel company which owns a number of its assets at a time when our competitors have become increasingly asset light inspires great confidence in the owners we works with," added Daines.

"In this increasingly complex world it shows that AccorHotels is prepared to fight battles on all fronts, including the development of our digital strategy."

Accor Hotels' portfolio of owned and leased properties currently numbers 1,100 hotels.

With regards the addition of Fairmont, Raffles and Swissotel, Daines said that AccorHotels now has one of the strongest collection of luxury and upmarket brands, alongside its existing Sofitel, MGallery and Pullman collections. "But this does not mean that we will be abandoning our economy and midscale brands. We still have a huge appetite for the growth of our Novotel, Mercure and Ibis brands."

The acquisition of FHRI, with a large proportion of hotels in the US and Canada, will help turn AccorHotels into a truly international company, explained Daines. "We don't want to be seen as a French company any longer."

In the UK the present number of 222 AccorHotels is expected to reach 300 in the next three to four years, expanding from 30,000 bedrooms to around 40,000.

Thomas Dubaere, managing director, AccorHotels UK & Ireland, said the main focus of growth would be within the non-standard Mercure and Ibis Style brands.

"This is helped by the fact that around 65% of all hotels in the UK are independent and owners are keen to tap into brands which allow them some freedom," he said.

"There is also a very strong focus of growing our franchised and managed properties."

Around 43% of AccorHotels' UK properties are currently owned or leased by the company.

AccorHotels shareholders finalise acquisition of FRHI >>

AccorHotels confirms world's tallest Novotel will open in London >>

AccorHotels' HotelInvest division to open five hotels >>

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