Hotel group forecasts massive growth in Middle East travel

The French-headquartered company has established global corporate agreements with more than 200 multi-national companies - many of which have a Middle East presence - and this customer base will be mined to grow new business.

"We have spent the early part of this year reinforcing our relationships with Middle East partners and as a result we believe the 40 per cent growth target is very realistic," says Rob Hornman, Accor's Paris-based vice-president, international field sales and business development. The Middle East is one of three regions we have identified as growth 'hotspots' -the others being China and Russia."

A key factor in Middle East growth is Accor's representation by Airlink, one of the region's biggest movers of cargo and people with annual sales of more than $68 million).

Airlink corporate members benefit from exclusive hotel rates at Accor properties worldwide that can be pre-booked through a toll free number connecting Dubai and the Gulf countries.

Accor's Dubai office is now managed from Paris in close cooperation with Airlink. Besides the potential growth expected to be generated out of the Dubai office, Accor is also strengthening its presence in Saudi Arabia and plans to extend its its sales representation there.

"The potential of the KSA region is tremendous," says Hornman, "particularly with our fast-growing Sofitel brand which enables us to cater to the Saudi market in key European cities such as London, Paris and Amsterdam, as well as key resort destinations such as French Côte d'Azur, Courchevel, Mauritius and Sharm el Sheik."

Hornman believes the global travel market is recovering from the hammerblows of 2001 and demonstrated its resilience in 2003 despite the Gulf war, the SARS health scare, a weakening dollar, and currency crises in Latin America.

Accor exceeded its 500-million Euro profit forecast for the year - and although down 4.3 per cent on 2002 in actual figures, like-for-like revenue grew 1.1 per cent after stripping out the currency effect.

"We are seeing encouraging signs of recovery - particularly in the US, UK, and Germany," says Hornman. "Business people still have to travel and the leisure sector is also showing less susceptibility to negative happenings. For example, the recent bombings in Spain have had very little effect on the willingness of Americans to visit Spain.

"More than 900,000 American tourists go to Spain each year and operators report few cancellations."

Accor's product diversity - from budget to upscale hotels - has helped cushion the group against the market downturn that severely affected many competitors in the past few years. With nearly 4,000 hotels in 90 countries (more than 450,000) rooms, the company opened 170 new properties during 2003 and over the past five years has invested close to 1-billion Euros on expansion.

Roughly 43 per cent of its hotels are mid-range -Novotel and Mercure; 47 per cent economy - Ibis and other budget brands, with the balance comprising upscale establishments such as Sofitel.

Geographically, the spread is Europe - 36 per cent, Asia Pacific - 24 per cent, North America -16 per cent, and 12 per cent each for Latin America and Middle East/Africa.

"These figures represent the location of our properties but do not correspond with the region of origin for customers," says Hornman. "That's why are forecasting such growth from emerging markets like the Middle East.

"For example, China has overtaken Japan in outward bound travel with more than 20 million tourists last year. From the Middle East, we see the business sector leading the growth but in conjunction with a significant rise in leisure travel."