Meeting & Events Hotels In Virginia Beach|"Accor Chooses Bazin To Drive Asset-Light Hotels Strategy"

Source              :    reuters.com
Category         :    Meeting & Events Hotels In Virginia Beach
By                   :    Dominique Vidalon
Posted By      :    Hotels in Virginia Beach North Courtyard

Meeting & Events Hotels In Virginia Beach

Accor has named private equity specialist Sebastien Bazin as the French hotel group's new chairman and chief executive in a move expected to speed Accor's asset sales to boost investor returns. The appointment of Bazin, who has ended all his duties as head of European operations for U.S. investment fund Colony Capital, Accor's largest shareholder, was made at a board meeting on Tuesday morning. Colony and other large shareholders had been unhappy with the pace at which Accor was progressing with its strategy of expanding in emerging markets to cope with a weak Europe while moving away from hotel ownership towards franchising or managing hotels for others. Potential disposals mainly involve hotels, with the company banking on the strategy to lift its operating margin to more than 15 percent of sales by 2016, from 9.3 percent at the end of last year.

Accor, which competes with global rivals InterContinental , Marriott and Starwood, wants to operate 80 percent of its rooms under franchise or management contracts and 20 percent in owned and leased hotels by the end of 2016. At June 30 this year, 42 percent of the hotel portfolio was owned by Accor, the company's website says. Rival InterContinental, meanwhile, owns 1 percent of its portfolio and had a 2012 operating margin of 33 pct of sales. Bazin, who was also Accor's vice-chairman, will assume his CEO duties with immediate effect, Accor said in a statement confirming a report by Reuters. "I take on this new role with great ambition for the group, to which I am deeply committed, and acute awareness of the challenges," the statement quoted Bazin as saying. Bazin, a French national, became vice-chairman in April after the world's fourth-largest hotel group by sales ousted Chairman and Chief Executive Denis Hennequin and put in place a transition-management team. Bazin, 51, is leaving Colony after 16 years with the $27 billion U.S. private equity firm. "He knows Accor and the hotel business inside out, and for him it's a personal challenge to jump to the operational side," a source close to the matter said.

Colony invested 1 billion euros ($1.34 billion) in Accor in 2005 and was joined in 2008 by French private equity fund Eurazeo. Together they control 21.4 percent of the group and four board seats. Colony directly owns about 11 percent of Accor. "Given that Accor is among Colony Europe's largest investments, Sebastien's move represents the perfect opportunity to optimise the company's ability to drive a substantial enhancement of shareholder value," Colony Capital said in a statement. Over the past 12 months investors have made a 13.6 percent return on Accor shares, assuming dividends were reinvested. That compares with 37.5 percent on rival InterContinental, Thomson Reuters data show. Bazin's appointment also has the approval of the head of Eurazeo, Patrick Sayer. "Competency, experience, vision, courage: Sebastien Bazin is the man of the situation for Accor," he wrote on Twitter. Colony is also a key shareholder of Carrefour, Europe's largest retailer, where Bazin, who acts as vice chairman of the board, was believed by some investors, unions and analysts to be behind a failed plan to spin off the company's property assets from the rest of the business. "The key issue is that Accor's asset-light strategy of selling assets and developing its franchise will continue and even accelerate as Colony and Bazin initiated that strategy," said one sector analyst who declined to be named.

Colony masterminded the separation of Accor from its vouchers business Edenred in 2010 and the latter's successful listing. Former Accor CEO Hennequin was said by analysts and sources to have resisted pressure from its top shareholders - notably Colony - to split property holdings from the hotels business. At the time of Hennequin's ousting, sources said that stakeholders were losing patience with the weak performance of Accor shares and the pace of asset sales and franchising. Since news of Hennequin's departure broke on April 23, Accor's shares have risen 15.3 percent, outperforming its peers. The shares gained more than 2 percent in early trade on Tuesday but closed down 1.5 percent, against a 2.4 percent decline in the CAC-40 blue-chip index.

Source : reuters.com/article/2013/08/27/accor-ceo-idUSL6N0GS0II20130827