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

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.”

Passenger numbers rise at Dubai International Airport

Updated 10 December 2018

Passenger numbers rise at Dubai International Airport

  • Operator welcomes monthly jump after travel decline in past year
  • Dubai Airports launched its Strategic Plan 2020 in 2011 with the aim of increasing passenger capacity from 60 million a year to 90 million by 2018

LONDON: The number of passengers passing through Dubai International Airport rose by 2.1 percent in October compared with the same month last year, the operator Dubai Airports said on Monday.

The increase follows a drop in passenger traffic in September and a wider slowdown in the number of travelers passing through the emirate’s airport over the past year.

“Dubai International has been on record stating that passenger growth would be somewhat lower than in previous years, so this current performance is in line with my expectations,” said aviation analyst Saj Ahmad from Strategic Aero Research.

“That said, the airport has still grown over 2017 and will likely eclipse its 2018 target of handling over 90 million passengers and remain the world’s busiest international airport,” he said.

Dubai Airports CEO Paul Griffiths told a conference in Dubai last month that he expected just over 90 million passengers to use the airport this year, according to Reuters.

A total of 7 million passengers used the airport in October, compared with 6.9 million in the same month last year.

In September, passenger traffic fell by 0.2 percent compared with the previous year. The decline was blamed on the Eid Al-Adha holiday — with an associated spike in travel — falling in September last year.

Total passenger traffic in 2017 rose by just 5.5 percent year-on-year to reach 88.24 million people. This is a slower rate of growth than the 7.2 percent increase in 2015-16 and the 10.7 percent jump recorded between 2014-2015.

Dubai Airports launched its Strategic Plan 2020 in 2011 with the aim of increasing passenger capacity from 60 million a year to 90 million by 2018.

Under the strategy, the number of airport stands has been increased and terminal buildings expanded.

As demand grows, further work on the airport’s infrastructure will be needed, said Ahmad.

“Demand is not infinite — the airport is operating at nearly 98 percent capacity, so it stands to reason that only so much growth can be absorbed,” he said.

DXB handled 237,499 tons of cargo in October, a 2.5 percent increase on the previous month. Overall cargo volumes have fallen year-to-date by 0.9 percent to 2.1 million tons.