By Ruth Bender
PARIS-- Accor SA is ready to pursue more acquisitions to ramp up
its digital know-how as the French hotel group tries to fight back
against the growing dominance of online booking portals.
"The big ones will just get bigger, I don't want to depend on
them," said Chief Executive Sébastien Bazin, who is navigating the
French hotel group through a three-year turnaround that aims to
shore up the company's growth. "I want Accor to be an actor and
fight back."
Accor last year pledged to invest 225 million euros ($255
million) between 2014 and 2018 to better equip the group for a
world where customers increasingly book hotel rooms online, a
market dominated by such large Internet companies as booking
portals Expedia Inc. and Priceline Group. There are also new
entries in the field, including such tech giants as Google Inc.
Last week, Expedia Inc. and Orbitz Worldwide Inc. agreed to
merge in a move that would bring together many of the top U.S.
travel booking sites under one roof.
"I am not bitter about [such moves] but I am saying we need to
watch out that they are not getting the upper hand," Mr. Bazin said
in an interview Wednesday.
The rapid growth of such portals has been eating into hotel
groups' profits since they pay a commission that can range between
10% and 20% to the online booking sites.
Accor aims to take back some of that and is actively looking for
potential targets to shore up its own digital expertise, according
to the CEO. "I told my bankers: If there are opportunities, we need
to look at them," he said, adding that Accor's priority remains
having its turnaround plan succeed.
Accor last year bought French startup Wipolo, which offers
mobile travel solutions. Accor will mostly look in the startup area
but is also "open to something bigger," Mr. Bazin said.
Accor last year also hired Vivek Badrinath, a former top
executive at telecom firm Orange SA, to work on its digital
plan.
The owner of the Ibis and Sofitel chains is two-thirds into a
three-year turnaround launched when Mr. Bazin took over as CEO in
2013. Mr. Bazin at the end of 2013 started off the transformation
by splitting the hotel group into two business poles: one that runs
the group's 14 hotel brands, and another that manages the company's
real estate portfolio.
Over the past year, the hotel group started buying back hotels
that had been under lease or management contracts, investing a
total of EUR1 billion in its property portfolio and promoting
partnerships to boost its brands in such regions as China and
Central Europe.
"2014 was a rich year, the foundations are in place," Mr. Bazin
said on a conference call.
Accor said the group's turnaround efforts bore their first fruit
in 2014 as the French hotel group reported a 77% jump in net profit
to EUR223 million from EUR126 million, helped by better operating
profits.
Earnings before interest and taxes rose 15% to EUR602 million
from EUR521 million, boosted by a cost-savings plan and the
restructuring of the company's HotelInvest unit. Accor last month
reported a slight rise in sales, driven by a rebound in Europe in
the fourth quarter, that prompted the company to raise its
full-year profit goal.
Accor declined to provide any specific financial goals for the
year.
Write to Ruth Bender at Ruth.Bender@wsj.com
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