Alwaleed-backed AccorHotels closes in on property deal

AccorHotels sale of a stake in its property business is in its final stages, Europe’s largest hotel company said on Wednesday. (Reuters)
Updated 21 February 2018
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Alwaleed-backed AccorHotels closes in on property deal

PARIS: AccorHotels’ long-delayed sale of a stake in its property business is in its final stages, Europe’s largest hotel company said on Wednesday, after reporting record 2017 earnings.
The French group, with more than 4,000 hotels ranging from luxury Sofitels to the budget Ibis brand, also expressed confidence over prospects for this year and over potential returns to investors once the property deal is sealed.
There was initial disappointment over the absence of any concrete developments on the plans for outside investment in property unit AccorInvest — known as “Booster” by the company — as well as the lack of increase in the annual dividend.
But the shares recovered early losses to trade up 2.6 percent at 1055 GMT, as analysts welcomed the prospect of better returns for investors. The stock is up about 8 percent in 2018.
AccorHotels has said the stake sale, now delayed by more than six months, will give it greater financial leeway to accelerate growth and fight the rising challenges from companies such as Airbnb and online travel agents.
CEO Sebastien Bazin said it was “a matter of weeks” before a deal was sealed, while finance chief Jean-Jacques Morin said the group would adjust its dividend policy after the sale and hinted at a possible special dividend.
“Overall, an upbeat message with confidence around deal execution, RevPar (revenues per available room) and encouraging comments regarding the future cash return potential,” wrote Barclays analysts, who have an “overweight” rating on the stock.
AccorHotels, which competes with InterContinental, Marriott and Starwood, beat forecasts with a 10 percent rise in like-for-like operating profit to 492 million euros ($606 million) for 2017.
InterContinental, which focuses on business customers, also reported higher profits this week and unveiled plans to expand further in the upmarket part of the hotel industry.
AccorHotels has struck deals in areas such as concierge services and luxury rentals to try to combat competition from the likes of Airbnb and Expedia.
Bazin reiterated on a call to analysts and reporters that strong growth was expected from these new lines of business over the medium term.
The only region where AccorHotels did not have strong growth last year was South America and in particular Brazil, which is slowly emerging from a recession, although the company said trends in Brazil improved in the fourth quarter.
Bazin, who took over in August 2013, has been cutting costs and expanding in China and the luxury hotels market, with AccorHotels having bought FRHI Holdings, the owner of London’s Savoy and New York’s Plaza hotels.
In October, AccorHotels also clinched a deal to buy Mantra Group Ltd. for A$1.18 billion ($926 million) to create the biggest hotel group in Australia. Bazin said he expected to finalize the deal during the second quarter of 2018.
Kingdom Holding, Saudi billionaire Prince Alwaleed bin Talal’s investment company, has a 5.71 percent stake in AccorHotels. The prince was released last month from detention following an anti-corruption crackdown.
Asked if there had been any signs of a possible change in the prince’s shareholding, Bazin said: “We have been comforted on the fact that there was no change in governance, shareholding. Prince Alwaleeed is and remains the third-largest shareholder of this group.”


Palestinians in financial crisis after Israel, US moves

Updated 22 March 2019
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Palestinians in financial crisis after Israel, US moves

  • A Ramallah-based economics professor said the Palestinian economy more generally, remain totally controlled by and reliant on Israel
  • Israeli-Palestinian peace efforts have been at a standstill since 2014

RAMALLAH, Palestinian Territories: The Palestinian Authority faces a suffocating financial crisis after deep US aid cuts and an Israeli move to withhold tax transfers, sparking fears for the stability of the West Bank.
The authority, headed by President Mahmud Abbas, announced a package of emergency measures on March 10, including halving the salaries of many civil servants.
The United States has cut more than $500 million in Palestinian aid in the last year, though only a fraction of that went directly to the PA.
The PA has decided to refuse what little US aid remains on offer for fear of civil suits under new legislation passed by Congress.
Israel has also announced it intends to deduct around $10 million a month in taxes it collects for the PA in a dispute over payments to the families of prisoners in Israeli jails.
In response, Abbas has refused to receive any funds at all, labelling the Israeli reductions theft.
That will leave his government with a monthly shortfall of around $190 million for the length of the crisis.
The money makes up more than 50 percent of the PA’s monthly revenues, with other funds coming from local taxes and foreign aid.

While the impact of the cuts is still being assessed, analysts fear it could affect the stability of the occupied West Bank.
“If the economic situation remains so difficult and the PA is unable to pay salaries and provide services, in addition to continuing (Israeli) settlement expansion it will lead to an explosion,” political analyst Jihad Harb said.
Abbas cut off relations with the US administration after President Donald Trump declared the disputed city of Jerusalem Israel’s capital in December 2017.
The right-wing Israeli government, strongly backed by the US, has since sought to squeeze Abbas.
After a deadly anti-Israeli attack last month, Prime Minister Benjamin Netanyahu said he would withhold $138 million (123 million euros) in Palestinian revenues over the course of a year.
Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through its ports, and then transfers the money to the PA.
Israel said the amount it intended to withhold was equal to what is paid by the PA to the families of prisoners, or prisoners themselves, jailed for attacks on Israelis last year.
Many Palestinians view prisoners and those killed while carrying out attacks as heroes of the fight against Israeli occupation.
Israel says the payments encourage further violence.
Abbas recently accused Netanyahu’s government of causing a “crippling economic crisis in the Palestinian Authority.”
The PA also said in January it would refuse all further US government aid for fear of lawsuits under new US legislation targeting alleged support for “terrorism.”

Finance Minister Shukri Bishara announced earlier this month he had been forced to “adopt an emergency budget that includes restricted austerity measures.”
Government employees paid over 2,000 shekels ($555) will receive only half their salaries until further notice.
Prisoner payments would continue in full, Bishara added.
Nasser Abdel Karim, a Ramallah-based economics professor, told AFP the PA, and the Palestinian economy more generally, remain totally controlled by and reliant on Israel.
The PA undertook similar financial measures in 2012 when Israel withheld taxes over Palestinian efforts to gain international recognition at the United Nations.
Abdel Karim said such crises are “repeated and disappear according to the development of the relationship between the Palestinian Authority and Israel or the countries that support (the PA).”
Israel occupied the Gaza Strip and the West Bank, including now annexed east Jerusalem in the Six-Day War of 1967 and Abbas’s government has only limited autonomy in West Bank towns and cities.
“The problem is the lack of cash,” economic journalist Jafar Sadaqa told AFP.
He said that while the PA had faced financial crises before, “this time is different because it comes as a cumulative result of political decisions taken by the United States.”
Abbas appointed longtime ally Mohammad Shtayyeh as prime minister on March 10 to head a new government to oversee the crisis.
Abdel Karim believes the crisis could worsen after an Israeli general election next month “if a more right-wing Israeli government wins.”
Netanyahu’s outgoing government is already regarded as the most right-wing in Israel’s history but on April 9 parties even further to the right have a realistic chance of winning seats in parliament for the first time.
Israeli-Palestinian peace efforts have been at a standstill since 2014, when a drive for a deal by the administration of President Barack Obama collapsed in the face of persistent Israeli settlement expansion in the West Bank.