The multi-billion euro hotel investment arm of AccorHotels is to be spun off as a separate business to allow the French hospitality giant to “seize new growth opportunities”.
The initiative by the owner of the Sofitel and Ibis chains will allow third-party investors to take control of the division.
It comes three years into a transformation plan which has seen the development of two separate but strategically related business units.
AccorHotels is now pursuing its strategy of continuous improvement and significant expansion by initiating a project to create a dedicated subsidiary for its HotelInvest operations, according to the company.
The restructuring of the HotelInvest portfolio has significantly increased the value and profitability of the group's assets from €5.5 billion in 2013 to €7 billion last year with operating margins almost doubling from 4% to 7.8%.
Between 2013 and 2015, gross asset value increased from €5.5 billion to €7 billion and the profitability of the portfolio improved significantly, with operating margin standing at 7.8% in 2015 (versus 4% in 2013). As a result, HotelInvest is now Europe's leading hotel investor.
The aim is to strengthen AccorHotels' financial resources to accelerate growth, while also providing a legal structure that will ultimately enable third-party investors to hold the majority of HotelInvest's capital.
AccorHotels would use the additional financial leeway to develop its two business lines and “seize new growth opportunities, thereby maximising the group's overall value”.
Chief executive Sébastien Bazin said: “By making it possible to bring in new investors for part of our business, this project will significantly increase the resources available to the group to consolidate the respective leadership positions of HotelServices and HotelInvest, while also enabling us to continue to leverage synergies between the two business lines.
“This way, each business will be able to continue to grow within the group based on a valuation that reflects its specific business model and growth outlook.
“At the same time, all of our teams will remain under the AccorHotels umbrella brand.”
The move came as the company announced the completion of the take over of luxury brands Fairmount, Raffles and Swisshotel, boosting its presence in North America.
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