2013 Registration document and annual financial report - page 21

Registration Document 2013
19
Corporate Presentation
1
Strategic Vision and Outlook
High margins and strong cash generation
Revenue
670
399
150
1,219
EBITDAR
358
9
65
432
EBITDAR margin
53.4%
2.4%
43.5%
35.5%
EBITDA
352
4
62
418
EBITDA margin
52.5%
0.9%
41.5%
34.3%
EBIT
341
- 3
50
388
EBIT margin
50.9%
- 0.7%
33.3%
31.8%
Management/
Franchisor
Sales &
Marketing
Other
operations
HotelServices
The
HotelServices
business is divided into three segments:
ƒƒ
Management & Franchise,
corresponding to the fees paid by
all of the hotels under franchise agreements or management
contracts. In 2013, this segment generated €670 million in
revenue, with a commitment to delivering an EBITDAR margin
of 50% or higher;
ƒƒ
the Sales & Marketing Fund,
comprising dedicated fees, is
intended to be reinvested in full and therefore does not constitute
a profit center. In 2013, it generated a marginal loss of €3 million
at the EBIT level.
Altogether, the fees received for Management & Franchise
services and paid into the Sales & Marketing Fund amounted
to an aggregate €1,069 million in 2013, of which 48% from
HotelInvest hotels and 52% from hotels held by third parties;
ƒƒ
Other businesses,
which include certain activities related to
hotel operations, such as a timeshare business in Australia,
Strata, which manages hotel common areas in Oceania, the
corporate Procurement Department and the loyalty programs.
HotelServices is a P&L-driven business and a strong cash
generator, with a strategic focus on increasing business volumes
(€11.5 billion in 2013) and fee collection, primarily through business
development and growth in RevPAR.
Its
main challenges
are to:
ƒƒ
implement a business model based on
generating fees,
with
a portfolio of services adapted to owners’ needs, focusing on
contract profitability and optimizing cost management to enhance
the financial performance of Accor and its partners;
ƒƒ
optimize sales andmarketing strategies,
with projects planned
in such areas as customer relationship management, loyalty
programs and, more generally, digital services to enable more
agile revenue management and more effective use of distribution
channels, including online travel agencies;
ƒƒ
strengthen the brands,
which have now been reorganized into
three segments: Luxury & Upscale, which focuses on service
excellence and a development strategy that targets high-profile
hotels in strategic cities; Midscale, where a particular emphasis is
placed on innovation to more effectively differentiate the brands;
and Economy, where the aim is to capitalize on the successful
creation of the ibis megabrand to consolidate market leadership
and capitalize on economies of scale.
Performance indicators aligned with
HotelServices’ unique business features
Performance indicators for the fee-generating HotelServices business
are based on both operational and financial criteria:
Operational indicators
ƒƒ
Growth in the number of rooms.
ƒƒ
RevPAR and business volume.
ƒƒ
Operating margin and flow-through ratio.
ƒƒ
Customer satisfaction indicator Net Promoter Score (NPS).
Financial indicators
ƒƒ
Growth in fees received.
ƒƒ
EBITDA and EBIT margins.
ƒƒ
Free cash flow (EBITDA – maintenance CAPEX).
These indicators are used to calculate incentives for HotelServices
executives.
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