Accor's Asian plans unaffected by Bali bombing

Accor's Asian plans unaffected by Bali bombing

Dow Jones, Bangkok

French hotel and leisure company Accor SA, one of the world's
largest hotel chain operators, said Wednesday it still plans to
double the number of its properties in Asia-Pacific over the next
five years, despite a recent terrorist attack in Bali.

Accor currently manages 197 properties in 15 countries in the
Asia-Pacific region, including eight it fully owns, out of its
roughly 3,900 hotels and resorts worldwide.

David Baffsky, chairman of Accor's Asia-Pacific operations,
said the negative impact of the Indonesian resort island bombing
on room bookings has so far been limited to a few properties in
the region and was not expected to be long-lasting.

"We have already seen substantial shifting of activity to
other destinations in the region. It is so far a localized
issue," Baffsky said.

In Bali itself, the Mercure Kuta Bali hotel located close to
the bombing site has seen little short-term impact as it was used
by media and security after the bombing, but is suffering a drop
in forward bookings, Baffsky said.

The group's other property in Bali, a Novotel, on the other
side of the island now has a 30 percent occupancy rate, down from
normally over 70 percent at this time of year, Baffsky said,
adding Accor's 22 other Indonesian hotels were little affected.

In Thailand, which benefited most after the Bali bombing, the
group's forward bookings are currently up 3 percent-4 percent on-
year in part due to a shift from Bali and partly because of the
start of the high season, Baffsky said. However, he added on the
Thai resort island of Phuket, Accor is suffering a drop in
bookings like other hotel operators.

Industry sources said Phuket hotels have suffered a 10 percent
or more decline in their bookings due to travel warnings issued
by certain countries and on concerns the island could become a
terrorist target. The Thai government is denying such risks and
has criticized the warnings.

Baffsky was speaking to reporters at the official opening of
the group's 17th property in Thailand. The new property is the
fourth Thai property to be placed under the Sofitel brand, the
group's luxury chain, and the 158th Sofitel worldwide.

Accor signed late last year a 15-year management contract for
the Sofitel Silom, a 38-story and 454 room hotel owned by Thai
property developer Sansiri PCL.

Baffsky said domestic customers account for over 70 percent of
Accor's Asia-Pacific demand. This means bookings by residents in
the countries where it operates helps it from being harder hit by
fluctuations in global tourism.

Baffsky said a main area of growth for the group in the region
over the next five years will be China where it hopes to bring
its presence "to a total of 60 to 100 properties under
management, from 18 now."

The group also wants to add more properties in Japan, where it
already has four hotels, and in Korea, where its first property
is to open soon.

Accor also aims to reenter the Indian market after a recent
exit, he said.

Serge Ragozin, Paris-based Accor's executive senior vice
president, said the group will also continue to look for
opportunities to expand in other parts of the world despite the
current situation. Since the Sept. 11 attacks in the U.S. last
year, Accor has continued to expand and has only postponed plans
for three new U.S.-based hotels, he said.

Accor earlier this week bought a two-thirds stake in Egypt's
Gezira Hotels and Tourism for $39 million, he said.

Ragozin also said despite a recent acquisition in Germany,
Accor was still talking to another German group, Steigenberger
Hotels & Resorts, "like everybody else in the industry."

According to earlier reports, leading hotel groups Hilton
Group PLC and Starwood Hotels & Resorts Worldwide are also eyeing
Steigenberger.

In early October, Accor signed agreements with German hotel
operator Dorint AG and its primary shareholder, which will give
the French group a 30 percent interest in Dorint and add another
93 hotels to the group's already strong presence in Germany, plus
another 20 properties in development. The deal's implementation
is subject to the approval of the EU's competition authorities.

Accor announced Tuesday third-quarter revenue was down 4.2
percent on-year to 1.82 billion euros, below market expectations.
Over the first nine months, revenue was down 1.7 percent to 5.40
billion euros.