Accor has drawn up a plan to tackle the tough global hospitality market as it posted a 3.5 percent drop in 2008 operating profit, which was in line with forecasts.
The measures amounted to a “battle plan to face a difficult environment” after “the effects of the global economic downturn quickly spread to the hotels business, especially in the fourth quarter,” Accor said in a statement.
The French hotel chain said it would cut spending on renovations by €125m this year, and €100m less annually from 2011 on expands plans. It would cut marketing and purchasing costs by €75m this year and a further €25m in 2010.
Operating profit before non-recurring items fell to €875m last year from €907m in 2007, Accor said. In October it said it was aiming for 2008 profit before tax of €870m-890m.
Six directors at Accor resigned in protest on Tuesday and warned of potential conflicts of interest after the French hotel group’s two big private equity shareholders won a board vote to combine the posts of chairman and chief executive. Accor Chief Executive Gilles Pelisson was named chairman of the board of directors.