2010 Annual Report Accor

8/3/2019 2010 Annual Report Accor

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2010 ANNUAL REPORT

AccorLeder and 100%

hoeie


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Message from Denis Hennequin 2

Governance structures 6

Board of Directors 8

Executive Committee 10

Accor around the world 12

A year of important change and growth 14

Powerfu brands with enormous vitaity 24

Hote expertise that makes a the difference 52

Empoyees are the mainstay of our performance 62

A committed, responsibe, pioneering eader 74

Performance indicators 84

Corporate directory 108

Coens


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MESSAGE

Denis HennequinCHAIRMAN AND CHIEFEXECUTIVE OFFICER

I am very proud to address you today in my

capacity as Chairman and Chief Executive Officer.

Having served on the Board of Directors, I was

aready very famiiar with Accor, but today, now

that I see it from the inside, I obviousy have a

different view of the Group. I am fuy aware of

Accors powerfu cuture, the many strong bonds

that bind team members and their attachment to

the Group. At Accor, hospitaity is not just a

sogan; its a way of ife for the 145,000

empoyees that are our most important asset.They represent the many different job categories

within our organization and embody the skis

we need to everage, deepen and share.

Im especiay peased to take over the reins of

this outstanding company at a time when its

financia resuts are sharpy higher. Now entirey

focused on hotes, the new Accor turned in a

good performance, benefiting fuy from the

economic recovery, which acceerated in the

second haf. This strong showing attests to the

vaidity of our business mode. Indeed, our

operations on a continents and in a market

segments from budget to uxury payed a

arge part in our success. The recovery was even

faster and bigger than anticipated. In neary a

markets, the increase in demand was foowed by

a gradua stabiization in room rates. In Europe,

growth was driven initiay by the United

Kingdom and Germany, foowed by France.

Strong demand in emerging markets, which

offset the decine in business in 2009, continued

Dear shareholders, customersand fellow Accor team members,

HAIREXECU


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MESSAGE

Sofite in uxury. With a highy-segmented offer,

were we equipped to satisfy our customers

increasingy specific expectations. We now need

to strengthen our brands so that they express

more personaity. They wi be more assertive in

their advertising, more audacious in their stying

and more innovative in their service offerings.

As the core component of our strategy, they wi

ead the way in creating enterprise vaue. Brand

sense is a mindset and a discipine that must

be expressed every day in every way. Our priority

is to reinforce each brands DNA. One good

exampe is ibis, which is not ony the eading

contributor to Accors resuts but aso a rare

asset. In an economy segment that is price-

centric, ibis deivers an extra touch of spirit and

warmth that customers recognize and which

makes a the difference. This focus on the

brands must create an affective reationshipwith customers that goes beyond a hotes

features and price. The objective is aso financia

since powerfu brands wi encourage

franchisees and property investors to join us.

Sofite has emerged as a recognized payer in

the uxury segment by thoroughy reworking

every facet of its offer, refining its network and

adopting new advertising codes. Were

approaching the brands one at a time, as is the

case with Puman, which has the strengths

needed to become a benchmark in the very high

potentia market for conventions and seminars.

These efforts to everage our skis and brands

are vitay important. In a company ike Accor, we

must be constanty on the move and focused on

innovation in order to reinvent the hote

industry. We wi accompish this by questioning

every aspect of our business: design and stying,restaurants and dining services, IT systems to

respond to the exposive growth in digita

media, and sustainabe deveopment since

customers and partners are more and more

attentive to these issues and justifiaby so. We

wi aso achieve our goas by forging high vaue

added partnerships with banners and brands

that are we known and generate strong

emotiona invovement. Thats the key if we want

to anticipate customer needs and provide them

with unique experiences. At the same time, we

need to understand our customers better, and to

that end we have a highy-effective too that we

can everage our A|Cub oyaty program. We

wi activey deveop the program so that it wi

act as our ambassador and a coser ink to hote

guests, with the goa of forging reationships

based on reciprocity and sharing. I intend

to focus my attention on a of these brand-

reated issues.

> Speeding our development

Top ranked in number of rooms or number ofhotes on four continents, Accor wi step up the

pace of deveopment by opening more than

100,000 rooms by 2013. We wi strengthen

our positions in Europe, where hote chains

account for ony 25% of the industry tota

compared with over 70% in the United States,

by deveoping franchising and remaining open

to possibe targeted acquisitions. At the same


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time, we wi broaden and deepen our

internationa network with a focus on fast-

growing emerging markets. Im thinking in

particuar of China, India and Brazi, three

markets whose rapid growth is fueed by the

emergence of a powerfu midde cass.

In addition to these major projects, were

pursuing our strategy of divesting property

assets, which is another foundation of our

business mode and vitay important if we wantto make our business ess voatie and procure

the resources we need to meet our ambitious

objectives. In 2011 and 2012, our goa is to

dispose of 1.2 biion in hote assets. The

proceeds from these saes wi be used to pay

down debt which wi be cose to zero at the

end of the year and to create vaue.

> Making sustainable developmenta competitive advantageWere pursuing our expansion whie taking

advantage of our expertise in sustainabe

deveopment. Thanks to the Earth Guest

program initiated in 2006, Accor is recognized by

professionas as the hote industry eader in this

area. Our eadership has inspired and stimuated

our creative instincts. As proof, were aready

thinking about how to foow up on the program.

Our goa is to be the driving force and the

standard-setter in the industry. Whie we fee its

our duty to promote sustainabe deveopment, this

commitment aso provides us with competitive

advantage. To attain our goa, we wi deveopmore scientific, more quantifiabe ways of

anayzing our environmenta footprint. Its crucia

for us to maintain these ties with the Earth and

with our host communities, at a eves.

> Hiring and retaining the best peopleIn a service business ike ours, empoyees a

145,000 of them are a-important. Through

their daiy contact with customers and their

skis and passion for the profession, they are

truy on the frontine when it comes to ensuring

our service quaity and image. Their diversity and

capabiities are our greatest asset. The chaenge

we face is to attract and retain high-potentia

peope by enabing them to deveop skis they

can use throughout their working ives. We

provide them with opportunities to grow and

gain experience via the network of AccorAcademies that have made our Group the

words eading hote schoo. Retaining the best

peope aso means making their jobs and their

ives meaningfu. In this respect, the Accor

Corporate Foundation is making a powerfu

contribution by supporting initiatives put

forward by more than 3,000 team members to

create ties with oca communities. To date, the

Foundation, which I am honored to serve as

Chairman, has supported 84 programs around

the word and is doing an exceent job of

expressing our vaues.

> 2011: a year of restartingand accelerationThe signs for an ongoing recovery in 2011

are positive despite economic and poitica

uncertainties around the word. Our teams are

highy motivated and committed to staying at

the head of the pack. So the time has come to

step up the pace of transformation and

expansion with the goa of truy making a

difference and increasing our ead. I firmybeieve that our future success depends on the

abiity to maintain momentum whie constanty

asking hard questions, thereby creating positive

tension and energy. Backed by this way of

thinking, our human assets and our financia

fexibiity, Accor tomorrow wi be even more

attractive, innovative and forcefu, and thats

my most cherished wish.


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GO

VERNANCESTRUCTURES

GovenancstructuesThe Company is governed by a Board of Directors, which determinesthe Companys strategy, oversees its impementation, examinesany and a issues concerning the efficient running of the business,and makes decisions on a matters concerning the Company.

In accordance with the aw and the Companys

Byaws, the Chairman and Chief Executive Officer

chairs Board meetings, organizes and eads

the work of the Board and its meetings, ensures

that the Companys corporate governance structures

function effectivey, and obtains assurance

that directors are in a position to fufi their

responsibiities.

The Chairman and Chief Executive Officerrepresents the Company in its deaings with third

parties and has the broadest powers to act on

behaf of the Company in a circumstances. The

situations where the exercise of the powers of the

Chairman and Chief Executive Officer is subject to

the prior approva of the Board of Directors are

detaied in the report of the Chairman of the Board

of Directors prepared pursuant to artice L. 225-37

of the French Commercia Code.

The Byaws stipuate that each Board member

is required to hod at east 500 Accor shares.To promote high attendance rates at Board

Meetings, 50% of the tota fees awarded to

members of the Board of Directors are aocated

based on their attendance record.

Accor compies with the AFEP/MEDEF Corporate

Governance Code for isted companies as amended

in December 2008, except with regard to the

matters described on pages 78 and 83 of the 2010

Registration Document.

The Board of Directors assesses the independence

of its members. For the purpose of this assessment,

the Board appies the criteria set out in the above-

mentioned AFEP/MEDEF Corporate Governance

Code which state that a member of the Board

of Directors of a corporation cannot be quaified

as independent if he or she:

is or has been at any time in the ast five years

an empoyee or a corporate officer of thecorporation, or an empoyee or director of its parent

or a company that it consoidates;

is a corporate officer in a company in whichthe corporation directy or indirecty hods

a directorship, or in which an empoyee appointed as

such or a corporate officer of the corporation current

or in the past five years hods a directorship;

is a customer, suppier, investment banker orcommercia banker:

that is materia for the corporation or its group, or

for which the corporation or its group representsa materia proportion of the entitys activity;

has cose famiy ties to a corporate officer;

has been an auditor of the corporation in the astfive years;

has been a director of the corporation for morethan tweve years.


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The AFEP/MEDEF Corporate Governance Code

also states that directors who represent major

shareholders of a corporation or its parent may be

considered as independent provided that they do

not participate in the control of the corporation. Ifthe shareholder owns 10% or more of the

Companys capital or voting rights, the Board of

Directors should systematically review whether that

shareholders representative may be qualified as

independent, based on a report issued by the

Compensation, Appointments and Corporate

Governance Committee and taking into account the

Companys capital structure and any potential

conflicts of interest.

In accordance with the Company and Directors

Bylaws, Paul Dubrule and Grard Plisson,Co-Chairmen and Co-Founders, attend Board

meetings in a consultative capacity, and may be

invited to attend meetings of the Board Committees.

Since February 2009, the Board of Directors

has been assisted in preparing its decisions by

the following three Board Committees:

the Audit and Risks Committee, now comprising

three members, including two independent

members: Philippe Citerne (Committee Chairman),

Virginie Morgon and Jean-Paul Bailly;

the Commitments Committee, comprising

five members, including three independent

members: Sbastien Bazin (Committee Chairman),

Sophie Gasperment, Mercedes Erra, Philippe Citerne

and Patrick Sayer;

the Compensation, Appointments and Corporate

Governance Committee, comprising five members,

including three independent members: Bertrand

Meheut (Committee Chairman), Jean-Paul Bailly,

Thomas Barrack, Franck Riboud and Patrick Sayer.

The organizational and operational framework

applicable to the Board of Directors and the Board

Committees is described in the Directors bylaws(1).

In addition, members of the Board adhere to the

Directors Code of Conduct(1), which defines the

scope of the directors duty of diligence, discretion

and confidentiality, and sets out the rules applicable

to trading in the Companys securities.

Lastly, with a view to preventing any potential

conflict of interests, members of the Board are

required to complete a statement every year

disclosing any and all direct or indirect ties they

have with the Company.

The procedures for organizing and preparing

the work of the Board during 2010 are described

in the Report of the Chairman of the Board

of Directors prepared pursuant to article L.225-37

of the French Commercial Code(1).

In 2007, the Board of Directors formally assessed its

own performance with the support of a specialized

consulting firm. The results of this process, which

involved one-on-one meetings with each director,

were presented to the Board of Directors, which

discussed the matter at two Board meetings. In

light of the substantial changes in its composition

and organization in 2009 and 2010, the Board felt

that a new assessment would not be timely and

decided to postpone the process until early 2011.

(1) See the 2010 Registration Document.


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BOARDOFDIRECTORS

Boado DirecorsIn accordance with the Companys Byaws, Pau Dubrueand Grard Pisson, Accors Co-Chairmen and Co-Founders,attend Board meetings in a consutative capacity.

lDenis HennequinChairman and Chief Executive Officer

Denis Hennequin joined Accor as a directoron May 13, 2009. He became Chief Executive

Officer on December 1, 2010 and was subsequenty

appointed Chairman and Chief Executive Officer.

His current term of office as a director expires

at the cose of the Annua Sharehoders Meeting

to be caed to approve the accounts for the year

ending December 31, 2010.

lPhilippe Citerne(1)Vice-Chairman

Phiippe Citerne has been a director of Accorsince January 9, 2006 and a director and Vice-

Chairman of the Board since May 13, 2009.

His current term of office expires at the cose

of the Annua Sharehoders Meeting to be caed

to approve the accounts for the year ending

December 31, 2011. Socit Gnrae, represented

by Phiippe Citerne, was previousy a member

of Accors Supervisory Board, from June 28, 1983.

Mr. Citerne was Chief Operating Officer of Socit

Gnrae between 1997 and Apri 2009 and is now

Chairman of Tcom & Management SudParis.

He is aso a director of Sopra Group and Rexecode,a private economic research center.


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l

Jean-Paul Bailly(1)

Jean-Pau Baiy has been a director of Accor since

May 13, 2009 and his current term of office expires at the

cose of the Annua Sharehoders Meeting to be caed to

approve the accounts for the year ending December 31, 2011.

He has been Chairman of the La Poste Group since 2002 and

Chairman of the Supervisory Board of La Banque Postae since

2006. Mr. Baiy aso represents the French State on the Board

of GDF Suez, and is a director of CNP Assurances and Sopassure.

lThomas J. BarrackThomas J. Barrack has been a director of Accor since

January 9, 2006 and his current term of office expires at

the cose of the Annua Sharehoders Meeting caed to


He was previousy a member of Accors Supervisory Board,

from May 3, 2005. Mr. Barrack is Founder, Chairman

and Chief Executive Officer of Coony Capita LLC and is

aso a director of Chaenger Financia Services Group Ltd.

lSbastien BazinSbastien Bazin has been a director of Accor since

January 9, 2006 and his current term of office expires at the

cose of the Annua Sharehoders Meeting caed to approvethe accounts for the year ending December 31, 2010. He was

previousy a member of Accors Supervisory Board, from

May 3, 2005. Mr. Bazin is Principa, Managing Director Europe

and Chief Executive Officer of Coony Capita SAS and is aso

Chairman and Chief Executive Officer of Socit dExpoitation

Sports & vnements and Hoding Sports & vnements.

lMercedes Erra(1)

Mercedes Erra has been a director of Accor since

February 22, 2011. Sharehoders wi be asked to ratify her

appointment to the Board at the Annua Sharehoders Meeting

of May 30, 2011. Her current term as a director wi expire at

the cose of the Annua Sharehoders Meeting to be caed to


Ms. Erra is Executive Co-Chairman of Euro RSCG Wordwide.

l

Sophie Gasperment(1)

Sophie Gasperment has been a director of Accor since

June 29, 2010 and her current term of office expires

at the cose of the Annua Sharehoders Meeting to be caed

to approve the accounts for the year ending December 31, 2012.

Ms. Gasperment is Chief Executive Officer of The Body Shop

Internationa and was appointed as a French Foreign Trade

Advisor in 2005.

lBertrand Meheut(1)

Bertrand Meheut has been a director of Accor since

May 13, 2009 and his current term of office expires at the

cose of the Annua Sharehoders Meeting to be caed to


Mr. Meheut is Chairman of the Cana+ Group Management

Board and is aso a director of Aquaree.

lVirginie MorgonVirginie Morgon has been a director of Accor since

May 13, 2009 and her current term of office expires at the cose

of the Annua Sharehoders Meeting to be caed to approve

the accounts for the year ending December 31, 2010. Ms. Morgon

is a member of the Executive Board of Eurazeo and aso sits on

the Board of Directors of the Womens Forum WEFCOS.

lFranck Riboud(1)

Franck Riboud has been a director of Accor since

January 9, 2006 and his current term of office expires at

the cose of the Annua Sharehoders Meeting to be caed to


He was previousy a member of Accors Supervisory Board, from

Juy 3, 2001. Mr. Riboud is Chairman and Chief Executive Officer

of Danone and is aso Chairman of the Board of Directors of

Danone Communities, a director and Chairman of the

Remuneration Committee of Renaut SA and a director of Lacoste.

lPatrick SayerPatrick Sayer has been a director of Accor since August 27,

2008 and his current term of office expires at the cose of the

Annua Sharehoders Meeting to be caed to approve the

accounts for the year ending December 31, 2012. Mr. Sayer is

Chairman of the Executive Board of Eurazeo and is aso

Chairman of the Board of Directors of Europcar Group and a

director of SASP Paris Saint-Germain Footba, Hodeis, Gruppo

Banca Leonardo and Coyzeo Investment Advisors.1 Independent director.


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0

EXECUTIVECOMMITTEE

1

3

5

7


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Excuive commiee

1l Denis Hennequin C C E O

2lYann Caillre P C O O

3l Grgoire Champetier G C M OBrand Strategy Design Strategy Marketing Distribution

4lDominique Esnault G C O SDeveopment Franchising ProcurementTechnica Services and Design Management

5lSophie Stabile G C F OFinances Groups Information Systems

6lMarc Vieilledent G E V-PA MAsset Management and Strategy Mergers-Acquisitions

7lAnne-Marie Cambourieu G C H R OHuman Resources Group Organization TransformationSustainabe Deveopment

8lPascal Quint C SLega Affairs Insurance Risk Management Audit Department Secretary of the Board of Directors

AT JANUARY 24, 2011


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2

ACCORAROUNDTHEWORLD

EBITEBITDAR MARGIN

30.5% 446m

Accor, the words argest hote

operator and the undisputedeader in Europe has 4,229 hotes

and 507,306 rooms.

In todays rapidy changing word,

were deveoping at an ever-faster

pace by forging high-quaity

partnerships, whie taking into

account the need to preserve

our panet and its resources

and to meet the expectationsof our host communities.

Acco aroudte wod

5,948mREVENUE

KEY F IGU RES AT DEC EMBER 31, 2010

NORTH AMERICA

22% of the hote portfoio1,107 hotes 112,644 rooms9 Sofite, 8 Novote,1,028 Mote 6, 62 Studio 6

LATIN AMERICA

AND CARIBBEAN

6% of the hote portfoio187 hotes 28,634 rooms9 Sofite, 4 MGaery, 1 Puman,19 Novote, 70 Mercure, 72 ibis,

11 Formue 1, 1 Coraia


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A yer ofiportant chageand gowhFor Accor, 2010 wi aways represent .With the demerger of the Hotes and Prepaid Services businesses,

the Group has entered a new era in its history. Now 100% focused

on hotes, Accor can everage its key assets to move to the next eve.


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6

AYEAROFIMPORTANTCHANGEANDGROWTH

A 100%he rouAccor has ambitious objectives as both a hote operator and a franchiser.A historic year, 2010 was aso intense in terms of the Groups expansionand operations. Thanks to its baanced business mode, Accor was abe to

take fu advantage of the economic recovery whie continuing to deveopat a sustained pace. This chapter ooks back on a truy unique year.

A successful demerger

On June 29, 2010, more than

88% of the sharehoders at the

Combined Ordinary and

Extraordinary Meeting voted to

approve the demerger of the

Hotes and Prepaid Services

businesses. On Juy 2, 2010,

Edenred, the new name

for Accor Services, was

isted on the NYSE

Euronext Paris stock

exchange. The resut of

a process aunched in

ate August 2009, the

demerger was carried

out in a few months

thanks to strong

empoyee invovement,especiay that of tax,

ega affairs and finance teams.

The merger gave birth to two

internationa, industry-eading

companies with no capita ties.

As a resut, Accor and Edenred

are today more visibe, more

attractive to investors and fuy

focused on a singe core

business. This new configuration

is enabing both companies to

speed their deveopment,

intensify their transformation,

expand through strategic

aiances and carry out financia

transactions to support their

future growth.

Fully focusedon hotel operations

In 2010, Accor pursued its

program of divesting non-

strategic assets and hote

properties.

Disposal of non-strategicassets.Accor sod Compagnie des

Wagons-Lits onboard rai

catering businesses to a joint

venture 60%-owned by Newrest,

an airine food services provider,

and 40% by Accor. With this

transaction, the Group has

withdrawn from onboard rai

catering. In March 2011, Accor

sod its stake in Groupe Lucien

Barrire, with which it had

partnered since 1989, to Fimaac

and Groupe Lucien Barrire for

268 miion. These two

transactions were fuy in ine

with the non-strategic asset

disposa program initiated in

2006 and which has ed to the

sae of the Groups interests inCub Mditerrane, Carson

Wagonit Trave, Go Voyages and

its institutiona food service

businesses in Itay and Brazi.

Disposal of hotel properties.Between 2010 and 2013, Accor

is panning to se 2 biion

in property assets with the goa

of reducing capita empoyed

and earnings voatiity.

Despite the years economic

uncertainty, the Group continued

to activey manage its assets,

even surpassing its objectives.

In 2010, a tota of 171 hotes

were refinanced, eading to a

630 miion reduction in

adjusted net debt.


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Three major transactions were

announced:

in February, the sae of five

hotes in Europe to Invesco Rea

Estate for 154 miion;

in August, the sae of 49 hotesin France, Begium and

Germany to Predica and Foncire

des Murs for 378.4 miion;

The transaction incudes a

47.6 miion renovation program.

in December, the sae of

18 hotes in Sweden that

wi be operated under franchise

agreements.

A new dynamicFuy focused on hotes and the

undisputed European eader,

Accor has announced three major

objectives for 2015:

1. strengthen its ranking

as the words number one hote

operator;

2. consoidate its position as

Europes eading hote franchiser;

3. rank among the words top

three hote groups.

This growth strategy wi be

pursued by:

strengthening the Groupspresence in mature markets and

growing rapidy in emerging

markets;

constanty enhancing the hoteservices offers, which create vaue

for franchisees and investors.

Three major objectives for 2015

Strengthen our ranking as the worlds number one hotel operator.By operator, we mean the day-to-day management of hotels. This isthe case for 400,000 rooms that are owned, leased or managed

by the Group 80% of the total. These day-to-day operations underpinour hotel management expertise.

1Consolidate our position as Europes leading franchiser by doublingthe size of the franchised network by 2015 and providing hotelsolutions that are increasingly aligned with the day-to-day concernsof our franchisees.2

Rank among the worlds top three hotel groups by stepping upthe pace of development, especially in fast-growing, emerging markets

like Brazil, Russia, India and China.

3

A unique businessmodel

The words eading hote

operator and Europes number

one hote franchiser, Accor is

backed by a business mode that

is unique in the industry. Caed

the asset-right strategy, the

mode features a range of hote

operating structures in which

Accor may be either the owner,

the manager or the franchiser.

The choice of operating

structure depends on the hotes

ocation and market segment.The advantage of this approach

is that it makes the business ess

cycica and enabes the Group

to focus on deveoping its hote

engineering expertise.

This business mode and Accors

eadership position on four

continents were argey

responsibe for the Groups soid

recovery in 2010.


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8


The promising chainhotel market

With decining transport costs,

increasingy goba trade

and rising iving standards

in emerging economies, the

business and eisure trave

market is constanty growing.

A of these factors support the

deveopment potentia of hote

chains, which enjoy a bright

outook in both mature and

emerging markets:

In Europe, the words argesthote market with more than

six miion rooms, chain hotes

account for ony 25% of the

tota, compared with 70%

in the United States. In Itay, forexampe, chain hotes account

for just 7% of the tota. Accor

enjoys substantia potentia

for deveopment through

franchising, in particuar with

its Mercure and a seasons

brands, which are among its core

assets. There is aso growth

potentia in the economy and

budget segments in which

suppy is sti imited in Europe.

In emerging markets, needsare on the rise, with a arge

portion of the popuation now

having access to new consumer

goods and services and thus to

greater mobiity. Countries ike

Brazi, China, India and Russia

are future growth markets for

most Accor brands, especiay in

the midscae and economy

segments, which respond most

cosey to oca customer needs.

Priority to franchisingand managementcontracts

Between now and 2015, a fu

80% of Accors expansion wi

be through franchising and

management contracts.

These operating structures are

referred to as asset ight,

meaning that they are non-

capita intensive. Growth wibe driven mainy by franchising

in Europe and the United States

and by management contracts

in emerging markets. In the

uxury and upscae segment,

the Group is expanding mainy

through management contracts

in a regions.

A susaied aceof deveopenIn 2010, Accor continued to expand rapidy across a brands and a

regions. Key fact: 78% of rooms that opened during the year are operatedthrough franchise agreements or management contracts.

Hotel chain penetration rate, worldwide*

25%

70%

17% 17%11%

EUROPE

UNITED STATES

CHINA

AFRICA &MIDDLE EAST

LATIN AMERICA

* Figures as of May 19, 2010.


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Openings: 2010 was a good year

49%IN FRANCHISING

29%UNDER MANAGEMENT CONTRACTS

44%IN THE ECONOMY SEGMENT

25,000ROOMS OPEN ED, OF WHICH:

214NEW HOTELS

At year-end 2010, Accor had 4,229 hotes and 507,306 rooms.

Of the 214 hotes representing 25,000 new rooms that opened

during the year, 28% are in Asia and 33% are in Europe.

In the atter region, which is the words biggest hote market

and sti enjoys strong growth potentia, Accor strengthened its

top-ranked position and engthened its ead over the competition

by adding 92 hotes in 2010.

Etap Hote Wien Messe Vienna Austria

Sofite So Mauritius Mauritius

Novote Barceona City Barceona Spain

ibis Cermont-Ferrand Sud France

Mercure Bratisava Centrum Sovakia

a seasons Venezia Marghera Venice Itay


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0


2010 2015 (forecast)

Hotel portfolio by operating structure% of tota rooms

17%

Asset Light64%

Asset Light80%

19%

18%

22%

24% OWNED

FIXEDRENT LEASE

VARIABLERENT LEASE

MANAGEMENTCONTRACT

FRANCHISED

Deveopment through asset-ight

structures wi focus mainy on:

the budget 23%, economy36% and midscae 24%

segments;

Europe 40% and Asia-Pacific29%, two high-potentia

markets that

Accor knows we

and in which

it can everage

soid assets. In

Europe, the Group

wants to doube

the franchised

hote network

by 2015. In 2010,

more than 60

new franchised

hotes were

added to the

regiona portfoio. Once the

program is fuy ramped up, two

new franchised hotes wi join

the network a week on average.

To acceerate the pace of

expansion, Accor is targeting

sma nationa hote groups.

A franchise partnership signed

with Focus Hotes in the United

Kingdom has ed to the

integration of 10 new hotes that

wi join the Mercure network,which currenty has

45 hotes in the country.

Accor is aso very active in the

United States where it is reying

in particuar on franchising

to fue its expansion. In 2010,

a tota of 58 franchised hotes

began operating under

the Mote 6 banner.

Assertive growth inemerging markets

In response to strong demand in

emerging markets inked to the

expanding midde cass, Accor

has acceerated its deveopment

with the goa of rapidy

estabishing strong positions in

these regions, which have

enormous growth potentia. The

Group wi achieve this goathrough its economy portfoio

ibis and Etap Hote in particuar

and a soid presence in the

uxury segment with Sofite. This

strategy wi incude opening

hotes in partnership with

powerfu oca payers, as is the

case in India, and through

management contracts.

In 2010:

1,479 of the Groups4,229 hotes were operatedthrough franchising;

more than 49% of the hotesthat opened during the year

are franchised.

Outlook for 2015:

200,000 rooms to be operatedthrough franchise agreementsout of a tota of 700,000 rooms.

9%

14%

19%

30%

28%


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ibis Shanghai Lianyang China

Novote Yekaterinburg Centre Ekaterinbourg Russia

Franchising coud then beenvisioned in a second phase

of deveopment. Overa, 30%

of room openings are schedued

for Brazi, China, India and Russia.

In Brazil, a key market witha popuation of 200 miion,

Accor is the eader with

143 hotes across a segments,

from budget to uxury. In this

country, which wi host both

the FIFA Word Cup in 2014in 12 cities and the Oympic

Games in 2016, the Group

is panning to rapidy expand

its network through owned

and eased hotes as we as

management contracts and

franchise agreements. The goa

is to have 225 hotes in the

country by 2015, ed by the ibis

and Hote Formue 1 brands.

At year-end 2010, a tota of

74 Accor hotes were in the

pipeine in Brazi with 12 others

in neighboring countries.

In China, Accor is the secondargest internationa hote group

with 100 hotes and 26,500 rooms

in 42 cities. Its the Groups

fourth-argest market in number

of rooms and the fastest growing

in the Asia-Pacific region. Accor

opened 18 hotes representing4,000 rooms in China during the

year, mainy under management

contracts. By 2015, the network

wi doube to 200 hotes across

a segments. China is an

important market for Sofite,

where the brand has 23 hotes,

and Puman, which has

18 hotes in the pipeine.

In India, the Group has set itssights on becoming the eader inthis very high potentia market.

In Juy 2010, Accor and its partner

Intergobe created a new

investment fund with GIC Rea

Estate Pte. Ltd., the rea estate arm

of the Government of Singapore

Investment Corporation, and

Host Hotes and Resorts, a

US-based rea estate investment

trust. The funds first investment

invoves seven hotes currenty

being buit that wi operate

under the Puman, Novote

and ibis brands. At year-end

2010, Accor had 55 hotes

in the pipeine, most of them

in construction.

In Russia, Accor aready haseight hotes totaing 1,715 rooms.

The Group stepped up its

deveopment in 2010, opening

four hotes: three under the ibis

brand and one Novote. Thirteen

other hotes are schedued to

open by 2013, mainy Novote

and ibis units.

2010:

More than 70 new deveopment contracts were signed in Asia-Pacific.

With 16,000 additiona rooms, Accor has strengthened its position as

the regions eading hote operator. Its goa now is to further deveop its

presence in Asia, especiay in China and India, and to extend its network

in Indonesia, Thaiand and Vietnam, where it aready hods eadership

positions. In China, the years openings incuded the Sofite Dongguan

Humen Orienta, the ibis Shanghai Lianyang and the Puman ZhanGjiajie

in Hunan Province.


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2


Stonge-than-exected rowhAfter a chaenging year in 2009, Accor took fu advantage ofthe economic recovery in 2010 by everaging its agiity and the vaidityof its business mode. Key facts: incuded a 7.1%-increase

in revenue and a 1.9-point improvement in EBITDAR margin.

A rapid returnto growth

The year was shaped by a robust

upturn in demand in most

countries, foowed by a gradua

stabiization in average daiy

rates. Accor rebounded especiay

we and faster than expected

thanks to its:

pertinent businessmode, extensive

brand portfoio and

asset management

strategy that makes

it easier to adjust

to the ups and

downs of the

economic cyce;

highy-responsivemarketing approach, which

is underpinned by powerfu

distribution channes, the

vitaity and expertise of

the Groups teams and its

many saes campaigns;

baanced geographicapresence, with eadership

positions in either the number

of hotes or the number

of rooms on four continents;

determined focus oncontroing investments and

expenses through highy-

ambitious cost-reduction pans.

With the recovery intensifying

in second-haf 2010, Accor ended

the year strongy. Revenue was

up 7.1% at comparabe scope

of consoidation and constant

exchange rates to 5,948 miion.

An indicator of the Groups soid

operating performance and

profitabiity, EBITDAR margin

rose by 1.9 points, aso ike-for-

ike, to 30.5% of revenue. This

robust performance was due in

part to higher occupancy rates

and to cost-reduction pans that

exceeded their objectives. Now

that it consistenty generates

positive cash fow, the Group is

refocused on its core business

and is backed by a very heathy

baance sheet, the Group is

poised for acceerated growth.

Objectives metor exceeded

To counter the impact of the

crisis and prepare for a post-

recessionary economy, Accor set

ambitious objectives and

benefited fuy from the

improved business environment

through its efforts to:

ower costs. Headquartercosts were reduced by

132 miion in two years

versus a target of 125 miion,

whie owned and eased hote

costs were reduced by 165

miion in 2009 versus a target

of 150 miion;

contro maintenance andrenovation expenditure;


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Puman Dubai Ma of Emirates United Arab Emirates a seasons Venezia Marghera Venice Itay

Novote Bangka Pangkapinang Indonesia

dispose of assets. Accor hasaready carried out 30% of its

2010-2013 divestment program.

Asset saes in 2010 ed to a630 miion reduction in debt.

As a resut, Accor is in an

exceptionay strong financia

position that provides it with

considerabe financia fexibiity;

deveop through franchisingand management contracts.

During the year, 25,000 rooms

were added to the network,

of which 78% through these

two types of agreement.

All hotel segmentscontributed to growth

Whie the economic upswing was

not the same everywhere, it

affected a segments. This was

true for the upscae and

midscae, which is inherenty a

very cycica segment. Sofite and

Puman posted exceent resuts

thanks to the rebound in

corporate activity and businesstrave. Segment revenue was up

9% ed by the combined impact

of higher occupancy and average

room rates. Economy hotes

outside the United States saw a

soid 6.8%-increase in revenue,

ed by improved occupancy rates.

ibis, the segments main driver of

higher margins, turned in a very

good performance.

Growth that variedfrom one regionto another

Thanks to its widespread

geographic presence, Accor

was abe to benefit from the

economic recovery. Whie

business in emerging markets

and Latin America remained

dynamic in 2010, the year saw a

sudden upswing in Europe

where the Group has extensive

operations ed by the United

Kingdom, Germany and France. In

the United States, where the

market remained chaenging,

resuts improved in the second

haf, with higher occupancy rates

for Mote 6 and Studio 6.


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4


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Whether ong-estabished or recenty aunched,

standardized or non-standardized, each of the Groups

brands has its own DNA that makes a the difference.

At the forefront of Accors- ,the brand has its own vaue based on its image and

roots, its abiity to inspire confidence and create

differentiation, and the affective bonds forged witheach customer. Heres a review of the brands in 2010.

Powefu randswih enomousvitity


28/112

6

POWERFULBRANDSW

ITHENORMOUSVITALITY

Customer impacton the hotel offering

Changing customer behavior has

a direct impact on the odging

soutions and reated services

offered by todays hotes. In the

1950s and 1960s, the offer was

shaped soey by the peope thatproduced it mainy

independent hote

operators. Now that

the market is

structured around

major payers ike

Accor, marketing and

advertising have an

important impact on

customer decisions.

Whie brands remain

at the heart of the system and

pay an active roe in creating

preference, its customers who

are heping to reshape todays

hote industry. Changing

ifestyes and consumer behavior,

as we as the desire for origina

experiences, are aso making a

major contribution to these

deveopments.

Adaptable conceptsSociety is being transformed

by a number of deep-seated

trends. These incude the

growing importance of ethica

consumerism, the desire for

we-being and independence,

a return to simpe vaues,

sharing, the changing roe

of women, and the increasing

use of digita technoogy in

daiy ife. These trends have ed

the brands to rethink their

stye and appearance, their

communication strategies

and their product and service

portfoios. Three simutaneous

phenomena are apparent

in todays hote industry:

1. hote groups are reworking

their concepts and service

packages to refect consumer

trends. This means, for exampe,

providing customers with fitness

rooms open around the cock

where then can reax or work

out, with takeaway food services

so they can get something to eat

anytime and anywhere, or with

comfortabe Web corners open

day and night that enabe them

to stay in touch with famiy,

friends and business associates,

free of charge. This reworking

aso invoves redesigning hote

areas with a focus, for exampe,

on moduar soutions;

2. hote groups are increasingy

segmenting their offer to take

into account a wide range of

customer needs. The diversity

of goba markets and customer

expectations in todays word

are requiring them to broaden

their product and service

portfoios. Everyone must be

abe to find the right pace and

the right formua depending

on their needs and budget;

3. the industry is seeing the

emergence of innovative hote

concepts that break with

tradition as we as body

aggressive new advertising

campaigns. One economy

segment chain caims to offer

uxury for everyone with styish

hotes and free services that

Chnging emandThe hote market is impacted by constant change. As a resut, hoteconcepts and service offerings must be renewed at a faster pace. Today,customers and their ifestyes are the main drivers of recent marketdeveopments, which is why its so important to understand customersbetter and constanty anticipate their needs.


29/112

incude WiFi Internet access and

video on demand. This is aso

the case at Accor with Suite

Novote the new Novote

abe which invites gueststo experience a casua new way

of hote iving, in moduar suites

for medium-ength stays and

with innovative services,

incuding the oan of a Smart

car for getting around town.

Accors solutions

Backed by a comprehensive

portfoio of brands that is firmyaigned with its objectives,

Accor invests consideraby and

reguary to adjust its product

and service offering to changing

expectations and ifestyes.

The goa is to more fuy satisfy

customer needs and make the

brands more attractive, each in

its respective market segment.

Greater segmentationto meet a full rangeof expectationsAccor is currenty the ony hote

group with operations in afive market segments. With this

greater segmentation, the Group

can respond to a range of

customer profies, an array

of regiona markets and the

requirements of owners that

often have hotes operated under

more than one brand and in

severa segments. Accor can

everage this core strength

to assert the power and appea

of its brands and win new

markets and attract new

customers.

Powerful, differentiatedbrands

Strengthening each brandsDNA is the path chosen by

Accor to set itsef apart from

the competition and create a

reationship with customers that

goes beyond price to incude

preference, oyaty and affection.

Teams are invoved in depoying

brand projects Novote

with Next Up, Mote 6 with

Phoenix and Sofite with

Be Magnifique. These initiatives

have a positive impact on a

aspects of the brand, incuding

its empoyee reations and

empoyer image, services

offering, stye and appearance,

environmenta commitment

and customer promise.

Mote 6 Northake Texas United StatesSuite Novote Mnchen Parkstadt Schwabing

Munich Germany

Sofite Guangzhou Sunrich China


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8

POWERFULBRANDSW

ITHENORMOUSVITALITY

Building a powerful brand asomeans forging a partnership

with customers. This invoves anongoing diaogue to create a

specia reationship based on

reciprocity, trust and sharing.

Brands grow and improve by

istening to customers, studying

their reactions, integrating their

concerns and soiciting their

invovement. In this way, ibis has

estabished itsef in markets

around the word with a

straightforward, high-quaity

service offering and a peeress

business mode. AlCub, Accors

muti-brand oyaty program, is

an invauabe too for buiding aong-term reationship with

customers. It heps to understand

their behavior and attitudes so

that they can be provided with

personaized soutions.

Priority to innovationUnderstanding customers is a

major chaenge to which Accor

is responding with the goa of

creating differentiation and

deivering services adapted to

each profie. This approach

provides many opportunities for

innovation, for exampe, in the

reationship between pubic and

private hote areas, the choice of

construction and decoration

materias, the different types of

food and dining services offered,

the toos depoyed to gauge

customer satisfaction and the

use of new technoogies. In a

market in which each segment is

increasingy competitive, the

brands are constanty innovatingand reinventing themseves. For

exampe, they are deveoping

and testing ways of entertaining

business customers who often

trave aone. Sofite has

introduced a new service that

aows guests to read their emai

on the TV and access video on

demand, Etap Hote is testing a

new customized pay TV service,

and Novote, whose Web Corner

on a Mac offering has been a big

success, is deveoping a seection

of games on the X Box 360

Kinect that guests can pay, for

exampe, as a way of reaxing

between meetings. For todays

increasingy on-the-go customers,

booking toos have been

improved, with the roout of an

accorhotes.com appication

Famiy stays with the Famiy & Novote offerMercure AlCub counter

Novote Web Corner on a Mac


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for iPhone users. The Group has

aso created a Market Research

& Consumer Information

Department to support brand

deveopment by decipheringthe behavior and expectations

of customers, both current

and future, in order to provide

them with constanty enhanced

products and services.

New developmentsin 2010

As in years past, the brands

reasserted their personaities,expanded their offering, depoyed

new concepts and extended their

networks in 2010.

New improved productsand servicesIn 2010, the brands identified

and anayzed new trends,

reviewing and adapting their

current offerings to more

effectivey respond to emerging

expectations and create

differentiation. These incuded:

recenty aunched brands ikea seasons, with its fexibe

concept that appeas to

independent hote operators and

its unique a incusive services

package. Another exampe

is Puman, which is committed

to becoming the eader in the

upscae corporate meeting and

convention segment with a new

type of business hote and which

achieves differentiation through

high vaued added partnershipssuch as its recent agreement

with Nespresso;

brands that have successfuyrepositioned themseves.

Foowing its transformation,

Sofite is today recognized as a

eading uxury hote brand. Its

DNA is based on three core

vaues: a passion for exceence,

the essence of peasure and a

spirit of openness. As proof of its

successfu repositioning, Sofite

received more than 100 awards

in 2010 and its customersatisfaction index rose by 8%,

compared with 2009;

ong-estabished brandsthat have renewed their offering

and thoroughy renovated

their product. The past year saw

major renovations at ibis, which

stepped up the depoyment

of its new-generation hote

featuring revamped rooms and

common areas and aunched itsWeb Corner service, Etap Hote

with its cocoon and design room,

Mercure with the deveopment

of an innovative concept for its

Ddicaces room and Novote

with its new room.

Puman Nespresso partnershipibis aunches its Web Corner


32/112

0

POWERFULBRANDSW

ITHENORMOUSVITALITY

Campaigns that makean impactIn addition to depoying major

regiona promotions, the brands

were aso very active on the

communication front. To increase

their visibiity and buid

awareness, they aunched

innovative campaigns, such as:

hotelF1 with a hard-hittingcampaign asserting that On a

trouv moins cher que nous.

Cest nous.(1);

Etap Hotel, which investedheaviy in media advertising

in France and Germany whierenewing its partnership

with the Tour de France;

all seasons, with thea seasons Tour. The promotion

featured a truck in which a hote

room had been instaed that

traveed around Europe to meet

with potentia franchisees and

customers;

ibis, with its ivey, 360-degreeTENor15 summer promotiona

campaign for young peope that

was featured on Youtube and

Facebook;

Novotel, which aunchedits Famiy & Novote campaign

in seven countries;

Mercure, with its Let GoodThings Happen advertising

campaign, which demonstrated,

simpy and positivey, that

the brand provides customers

around the word with

memorabe moments;

MGallery, which appointedactress Kristin Scott Thomas as

ambassador of its hote coection.

Deepening the networksThe brands diigenty pursued

their deveopment in a year

shaped by a difficut economic

recovery. Today, Accor is top-

ranked in either number of

rooms or number of hotes in

Europe, Africa, the Midde East,

Latin America and Asia-Pacific.

Among the years more high-

profie openings were:

ibis, which added 60 hotes

totaing 10,000 rooms to the

network and in eary 2011

ceebrated the opening of

its 900th hote wordwide;

all seasons, which opened its

100th hote in 2010, ony three

years after the brands aunch;

Novotel, with a network that

now incudes 400 hotes. The

years more prominent openings

incuded hotes in Rio de Janeiro,Barceona and Munich;

Mercure, which opened

34 hotes during the year,

increasing the network to

674 units wordwide.

1 Less expensive than us? Thats us.

(1)


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An unrivaled portfolio of brands

Accor is the ony hote group present in the five market segments with attractive,

strategicay aigned brands: Sofitel in uxury, Pullman and MGalleryin upscae,

Novotel, Suite Novotel and Mercure in midscae, ibis and all seasons in economy,

and Etap Hotel, hotelF1 and Motel 6 in budget. The portfoio aso offers a range

of odging soutions with both standardized and non-standardized chains as we

as ong-stay faciities.

Th brad potfoio

Non-standardized Extended Stay

IN THE US

Standardized

IN EUROPE

OUTSIDE EUROPE IN FRANCE

IN CANADA

Reated Skis

Luxury

Upscale

Midscale

Economy

Budget

Figures in the foowing pages are as of December 31, 2010.


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2

THEBRANDPORTFOLIO

SofiteSofitel creates luxury hotelsthat blend French elegance,savoir-faire and sophisticatedhospitality with the very bestof each countrys localculture. In the worlds mostdesirable destinations andcapital cities, Sofitel offersguests seeking quality,sophistication and excellencean unforgettable immersionin the French art de vivre.

38 countries

121 hotels

29,987 rooms

5 openings

61% businesscustomers

39% leisurecustomers

2010 The year confirmed Sofitesrepositioning in the uxury segment,initiated in 2007, and produced

resuts worthy of the efforts made.Customer satisfaction increasedby 8% compared with 2009 andthe brand received approximatey100 prestigious awards from aroundthe word. In 2010, Sofite openedfive outstanding hotes, drawing onthe creative skis of some of thewords eading names in architectureand interior design. These incuded

Jean Nouve for the Sofite Vienna

Stephansdom in Austria andLek Bunnag and Kenzo Takadafor the Sofite So Mauritius. Thebrand aso renovated historic

estabishments ike the Sofite ParisLe Faubourg with Didier Gomez andSofite The Grand Amsterdam withSybie de Margerie. We positioned,widey recognized and endowedwith powerfu DNA, Sofite is nowembarking on a phase of dynamicgrowth to deveop its networkand increase brand vaue, inparticuar through an ambitiouspartnership strategy.Sofite Paris Le Faubourg Couture Apartment


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-Exhibition: Fashion StillsSofite ceebrated haute couture, hosting a photo exhibition entited Fashion Stis

that created a ink between the vibrant words of fashion, photography and uxuryhotes. Throughout the year, ten Sofites in North America and Europe incudingNew York, Los Angees, Washington, London, Rome and Munich dispayed worksby four we-known fashion photographers, incuding Jean-Marie Prierand Derek Hudson. This homage to the word of fashion aso provided a behind-the-scenes ook at eading fashion houses ike Dior, Saint Laurent and Chane.In this way, the hotes that hosted the exhibition served as ambassadorsof French eegance. The adventure is continuing in 2011 asthe exhibition traves to the Midde East and Austraia.

sofite.com

Sofite Phnom Penh Phokeethra Cambodia

Sofite The Grand Amsterdam Netherands


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4

THEBRANDPORTFOLIO

-Sofitel Vienna StephansdomLocated in the heart of the Austrian capita, the SofiteVienna Stephansdom rises ike a scupture in whichgass and stee combine to create a festiva of ightand shimmering refection. The work of internationayfamous French architect Jean Nouve, this unique18-story buiding features 182 rooms designed

to inspire diaogue and interaction with the hotessurroundings. Throughout the hote, visitors can see,admire, fee and breathe the city, says the artist.This impressive urban monument that is nowan integra part of the cityscape was createdby the architect assisted by a hostof artists and designers asa testimonia to Viennas goriouscutura heritage.

sofite.com

Sofite


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MGaeryLaunched in 2008, MGallery is a collection of upscalehotels, each with their own character and identity,derived from their distinctive design, remarkablehistory or outstanding location. In downtown or primetourist locations, their inimitable personality offers amemorable experience for travelers looking for hotelswith that extra little touch of soul.

18 countries33 hotels3,632 rooms5 openings100 hotelsby 2015

2010 The abe reaffirmed its positioningby choosing as its charismaticambassador Kristin Scott Thomas, anactress with an indecipherabe aurawhose fims are intensey rich andvaried much ike the MGaerycoection. Five new jewes were addedto that coection during the year: the

Gof du Mdoc Hte & Spa nearBordeaux, the Roya meraude Dinard,the Cour du Corbeau in Strasbourg inFrance, the Roya Beach Seminyak Baiin Indonesia and the Hote SavignyFrankfurt City in Germany. MGaeryaso introduced a specia offer caedthe Memorabe Moment, which aowsguests to participate in a specia touror activity designed to provide themwith a unique, unforgettabe experience.

MGaery now pans to expand at afaster pace. The goa is to have a networkcomprising around 100 hotes by 2015.

-On October 14, the entire MGaery famiygathered at the Cit de architecture et dupatrimoine in Paris to present two powerfurecent deveopments: the abes charming ambassador actress Kristin Scott Thomas and the pubication ofthe first printed guide, avaiabe in French, Engish andItaian versions directy in the hotes. The guide containsseections from the ambassadors trave og, in whichshe recas her favorite moments andexperiences in MGaery hotes.The event generated considerabemedia coverage for the abe.

mgaery.comHte Le Roya Lyon France


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6

THEBRANDPORTFOLIO

PumanPullman offers upscale contemporary hotels designed to meet the emerging needs

of travelers and event organizers. Each hotel is a unique, comfortable, hospitable livingenvironment whose lobby, restaurants and bars encourage meetings, discussions andfriendly conversation. In addition, a broad range of services, innovative technologiesand personalized meeting possibilities position Pullman as an international benchmark.

16 countries49 hotels

13,924rooms

16 hotels scheduledto open in 2011

Puman Oceanview Sanya Bay Resort & Spa China


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2010 During the year, Puman openedthree hotes, incuding thePuman Dubai Ma of Emiratesin United Arab Emirates, andexpanded consideraby in China.In eary 2011, the brand took over

the Mridien Montparnasse in theheart of Paris, thereby integratinginto the network one of Europes

argest conference hotes with953 rooms and a conferencecenter that can host up to2,000 peope. Puman iscommitted to becoming thebenchmark in the conventionand meeting segment and to

pursuing its expansion with thegoa of buiding a network of150 hotes wordwide by 2015.

-Today, the Puman brand aso encompasses resort hotes that combine traditionaresort services with the advanced connectivity of eading business hotes.One exampe is the Puman Oceanview Sanya Bay Resort & Spa in Hainan, China.With tropica forest, its private beach, outdoor swimming poo and ocean-viewrooms decorated in a traditionay Asian stye, the hote offers guestsa unique experience and the opportunity to take part in a widearray of sports activities.

pumanhotes.com


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61% businesscustomers

39% leisurecustomers

More than 21%of sales vianovotel.com

Suite NovoteIntroduced in 2010, Suite Novotel is a Novotellabel that invites guests to experience a new wayof hotel living. Targeting medium-stay customers,these innovative, offbeat hotels address emergingusage patterns with effective, yet highly-originalsolutions. They offer modular suites, a reworkedinterface between public and private spacesand services that make a real difference, likethe Suite Box (for Internet, local calls and free,unlimited video on demand), free massageson Thursday nights and the loan of a Smart carfor stays of more than four days.

2010 Buiding on Novotes image, the Suite Novotenetwork turned in a strong performance in 2010,with a substantia increase in onine saes thatadded 1.1 miion to revenue and a 77%-risein the number of chidren staying with the chain.Two new Suite Novotes opened, in Luxembourgand Perpignan, France. The brands goa isto doube the size of the network by 2015.

-The past year aso saw the introduction of thenew Suite Novote suite. Square, rectanguar,or eongated, the suite is fexibe. And becauseit is compatibe with new or existing buidingsof a shapes incuding former office buidings,it can hep speed the brands expansion indowntown ocations. Featuring styish, innovativedecoration and ayout, the suite aso incudesan equipped kitchenette, a Suite Box andeco-friendy bathroom products.

suitenovote.com

7 countries 28 hotels

-Graduay being depoyed in a newy buitand renovated hotes, the spacious newNovote room features styish furnishings, innovative

materias and ighting systems, comfortabe beds,environmentay-friendy fixtures and mutifunctionaequipment, such as a desk that can be transformedinto a coffee tabe. Moduar and equipped with a hostof amenities and advanced technoogies, the room putsthe focus on customer we-being. It can be adaptedto a ifestyes and situations for workor reaxation and for peope traveingaone or with the famiy.

novote.com

Suite Novote Luxembourg

Novote Mnchen City Munich Germany


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THEBRANDPORTFOLIO

MercureMercure offers business and leisure travellers a compelling alternative to chain

or independent hotels. It is the only midscale hospitality brand to combine the powerof an international network of more than 700 hotels, all meeting the same consistentquality standards, and the authentic experience of individually unique hotels rootedin their local community and run by owners passionate about their business.

2010

The year was intense, with the opening of 30 hoteson five continents and notaby the first hote inSovakia, in Bratisava. Other major events incudedthe aunch of a new internationa advertisingcampaign and the deveopment of an innovativeroom renovation concept caed Ddicaces, whosedepoyment began in France.The brand has set ambitious objectives. The goais to reach the symboic threshod of 1,000 hotesby 2015 whie reaffirming its roe as a key payerin the hospitaity industry.Mercure Paris Votaire France

Mercure Versaies Chteau France


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49 countries674 hotels83,428 rooms30 openings

-During the year, Mercure aunched its new Let GoodThings Happen advertising campaign. Its purposeis to showcase the power of the network as we as itswarm, human side. Invoving print media, posters andthe Web, the campaign was aunched in ate 2010 withposters in train stations and airports throughoutFrance, then extended to other Europeancountries and around the word.

mercure.com


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2

THEBRANDPORTFOLIO

ibisThe global benchmark in economy lodging, ibisis totally dedicated to taking care of its guests,everywhere around the world. Thats why each ofthe 900 Ibis hotels welcomes guests in the brandsinimitable style, shaped by the spirit of simplicity,accessibility and hospitality. ibis also offers theassurance of modern accommodations and a widerange of services, with a comfortable room, 24/7snacks and drinks, breakfast served from 4:00 a.m.to noon, a variety of dining options and a Web Corner

all delivering the finest quality and service forthe money. The brand has also demonstrated itscommitment to quality and the environment by earningworldwide ISO 9001 and ISO 14001 accreditation.

2010 The ibis network expanded considerabyduring the year, adding 44 hotes andaunching operations in new LatinAmerican countries. In eary 2011, thebrand aso opened its 900th hote,in Tangiers, Morocco. The year aso sawthe roout of the TENor15 summerpromotiona campaign, which was namedthe Best Advertising Campaign at theWordwide Hospitaity Awards for its

originaity and 360-degree approach.Reworked in 2010, the ibishote.comwebsite attracted more than 30 miionvisitors. Lasty, the brand continuedto modernize its network with thedepoyment of a new-generation hote.To strengthen its eadership, ibis pansto open 70 hotes by 2015, the equivaentof 10,000 rooms a year, focusing itsdeveopment on strategic regions ikeAsia and Latin America.

ibis ceebrated its 900th hotein Tangiers Morocco


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-The ibis Web Corner is one of the chainsinnovative new services. In an attractive, dedicated area ofthe hote, guests can surf the Web 24/7 for free, conversewith others via a webcam, send ibis e.cards or checkboarding times for their next fights.

ibishote.com

48 countries

900 hotels

107,735rooms

10,000new roomsby 2015

ibis Rungis France

ibis Aguascaientes Norte Mexico


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4

THEBRANDPORTFOLIO

2010 The brand opened its 100th hote in Berin and extended its operationsto new countries ike Begium Antwerp, Spain Madrid and Itay Venice.Its website now exists in Itaian and in 2011 wi aso be avaiabe in Spanish andDutch. Buiding on its success, a seasons pans to increase its visibiity and stepup its pace of deveopment so that the network comprises 350 hotes in 2015.

Created in 2007, all seasons is an economy brand being

developed through franchising in mature markets. It servesa full range of guests, from business to leisure and fromindividuals to families. Its all-inclusive package includesthe room, broadband Internet access, buffet breakfast anda host of extra amenities. The networks mid-sized,non-standardized hotels feature an innovative, colorful designand contemporary styling, with locations in city-centers andbusiness districts in Europe and Asia-Pacific.

a seasons

a seasons Amiens Cathdrae France


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-For 41 days, a truck in which an a seasons room hadbeen instaed toured Europe, visiting nine major citiesand six countries. The goa was to present this highy-origina product to franchisees and aso generate mediacoverage. Caed the a seasons Tour, the event was amajor success both on the ground and in the media.More than 200 franchisees attended and 30,000 peopetook part in a contest in which the winnersprize was a one-night stay in the truck.The Tour generated 184 media mentionsand 280,000 hits to the dedicatedwebsite and was asoreayed in more than 1,000 bogs.

a-seasons-hotes.com

10 countries

115 hotels

10,267 rooms

35 openings95% franchisedhotels

a seasons Venezia Marghera Venice Itay


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6

THEBRANDPORTFOLIO

2010 The brand produced strong resuts,taking fu advantage of the economicrecovery and the success of its styish newcocoon and design room. Depoyed in onethird of the network, the room has provenvery popuar with customers. Etap hoteaunched advertising campaigns in Franceand Germany and introduced its 30-dayeary booking offer throughout Europe.

Onine saes were up 25% for the year and9 miion Internet users visited theetaphote.com website. By 2015, Etap hotewi have depoyed the new room across theentire network, which by then wi comprisesome 600 hotes around the word.

Etap HoteHote Formue 1Etap Hotel offers highly-affordable, comfortableaccommodations with shower and selected services, suchas a buffet breakfast, Wi-Fi access, parking and snack vendingmachines. The brand is rated among the most innovativein its category, thanks in particular to its new stylish, restfulcocoon and design room concept. The European leaderin budget lodging, Etap Hotel is also a major player in thesouthern hemisphere with the Hotel Formule 1 brand.

Cocoon and design room aunched in 2010


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20 openings

More than 9 million visitorsto etaphotel.com

15 countries

480 hotels

42,892 rooms

-The year saw a arge number of openings, with we-ocated hotes in majorEuropean cities such as Berin, Brusses, Geneva and Vienna, where a 250-roomhote with the new room came on stream. Today, Etap Hote is the ony budgetbrand with operations in the main cities of ten European countries.

etaphote.com

hoteformue1.com

Europe Outside Europe


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8

THEBRANDPORTFOLIO

hoteF1

252 hotels

18,827 rooms

When it was created in 1984, Formule1 radically transformedthe hotel industry, making lodging widely affordable with

comfortable rooms for one to three people at less than100 francs (around 15 euros). In 2007, following a top-to-bottom renovation of its hotels, Formule1 changed its nameto hotelF1 in France. More dynamic than ever, the brandnow offers the attractively designed Duo and Trio rooms,along with all-new reception and breakfast areas.

2010 The year saw the competion of therenovation program and the aunchof the new hoteF1.com website.With the adoption of the new wordwidehote ranking system, hoteF1 acquired

its first star in France.

Its goa is to become the benchmarkbrand in the budget segment in termsof price and customer experience.

-In 2010, hoteF1 once again became the owest-pricechain hote brand. A new offer was introduced, featuringa 10%-discount for rooms booked 30 days in advance.The brand aso aunched an advertising campaignasserting that On a trouv moins cher que nous.Cest nous.*

hoteF1.com

hoteF1 Poitiers Sud Fran

hoteF1 Evry A6 France

* Less expensive than us? Thats us.


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Mote 61,028 hotels100,763 rooms55 openings70% leisure customers

Studio 662 hotels 6,883 rooms65% business customers and 15% long-stay customers

North Americas leading chain of economy motels, Motel 6is known for its comfortable, hospitable rooms at the lowest

price in the market.

2010 Mote 6 has becomeundisputed economy segmenteader in the United Statesand Canada, offering the bestvaue for money. During theyear, the brand increasedboth its market share and its

occupancy rate. Mote 6 asobecome the first US economyhote chain to receiveLeadership in Energy and

Environmenta Design LEEDcertification. The networkpursued its expansion throughfranchising at a faster pace,with 58 new franchisedestabishments in 2010.

Its goa is to be recognized

as a benchmark in equitabefranchising in order to moreeffectivey serve the brandand satisfy customers.

Studio 6 is positioned as the right choice in the North Americanong-stay budget segment. In 2010, Studio 6 opened three newunits and saw a considerabe increase in the number of ong stays.

-Every year, Mote 6 and Studio 6 empoyees join forcesand poo their energy for Nationa Saes Fun Day. In 2010,the event generated more than $2.5 miion in revenue

for the two brands.

mote6.com staystudio6.com

Studio 6 Mc Aen Texas United States

Phnix room


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0

2010 The brand asserted its new identity and refocusedon its core business of seawater therapy and spaservices. It aso pursued its expansion with two newdestinations in Itay and Bahrain open in 2011.Extensive renovation programs were aunched at

two high-profie faciities in Frances Brittany region Thaassa Quiberon and Thaassa Dinard.

thalassa.com

Adagio offers a range of apartments, from studio to two-bedroom, for

travelers who want to live just like at home and at their own pace whentheyre in a new city. Created in partnership with the Pierre & VacancesCenter Parcs Group, Adagio City Aparthotel provides comfortableaccommodations for stays from four nights to several months in the heartof Europes leading cities. The roomy, ready-to-live-in apartments comewith an array of optional services to make life easier and declining ratesfor longer stays.

Adagio City Aparthote

60% business customers80% of hotel nights during stays of over 4 nights

Thaassa sea & spaIn 2010, Accor Thalassa became Thalassa sea & spa,the Accor wellness brand. Thalassa sea & spa isthe world leader in seawater therapy with seasidedestinations in France, Italy and Morocco. The brandoffers guests all the lasting benefits of seawatertherapy as well as the pleasures of spa servicesin an atmosphere conducive to reverie andrelaxation. The facilities are staffed by professionalmasseurs, physical therapists, dieticians,hydrotherapists, estheticians and fitness instructorswho plan and prepare stays blending care, physical

activity, balanced nutrition and high-quality lodging,so that departing guests feel healthy and revitalized.

OthrHotl-elated

brnds

Adagio City Aparthote Wien Zentrum Vienna Austria


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Lentre

9 employees named Meilleurs Ouvriers de France

For more than 50 years, Lentre has been a benchmark and the ambassador

of French gourmet dining around the world. Its operations include receptionorganization, catering, events creation, training, retail shops and fine dining.With nine chefs named Meilleurs Ouvriers de France(a distinction awarded tooutstanding craftsmen) and one wine steward elected Worlds Best Sommelier,Lentre is the guardian of an exceptional culinary heritage and creatorof new trends. It also manages prestige restaurants like the Pr Catelan andthe Pavillon lyse Lentre in Paris.

2010 During the year, Lentre renovated itscooking schoo, which ceebrated its40th anniversary. Every year, the schoowecomes and shares its cuinary expertisewith 3,000 students from more than100 countries. In 2010, Lentre receivedthe Entreprise du Patrimoine Vivantabe

awarded by the French government tocompanies with outstanding craft skis.

lenotre.fr

2010

During the year, three newAparthotes opened in France in Grenobe, Tououse andSaint-tienne. In the yearsahead, the brand wi pursueits expansion in Europe withthe goa of buiding a networkof 90 Aparthotes by 2015.

adagio-city.com

3 countries

25 hotels

2,627 rooms

14 seawatertherapydestinations

Novote Thaassa Oron Saint-TrojanSaint-Trojan-es-Bains


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2

The words No. 1 hote operator, Accor has been deveoping

a high-vaue forneary 45 years. Extending from property management to customer

oyaty, this portfoio covers a aspects of the hote business.

Backed by the Groups powerfu network and operating exceence,this experience in hote engineering is a determining factor

for its investor partners and franchisees.

Hoe exertisethat maes the diffeece


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4

HOTELEXPERTISETHATMAKESALLTHEDIFFERENCE

A stong sesad markeing dynaicIn a highy-competitive market, the diversity, strategic aignment

and strength of Accors various distribution channes representa core benefit. Key fact: the growing number of onine saes anda deeper understanding of our customers and their expectations.

Hote PMS* direct booking system

Direct Web

Ca centers and e-mai/fax bookings

Indirect Web

Distributor partners and trave agencies

* Property Management System

The power and performance of TARSThe Trave Accor Reservation System TARS is truy unique

in the market. It functions as a technoogica patform to which

a distribution channes are connected:

direct saes, which represent 29% of the TARS tota,divided among:

direct onine saes through the accorhotes.com booking porta

and the different brand websites,

six ca centers in Paris France, So Pauo Brazi, Rabat

Morocco, Pune India, Kuaa Lumpur Malaysia and Daian

China, as we as a system to manage e-mai and fax bookings;

indirect saes via traditiona or onine trave agencies,whoesaers and tour operators, which account for 14% of TARSsaes and concern:

indirect Web saes with new distributors ike Expedia

and booking.com, and more than 150 trave sites,

traditiona distributor partners ike American Express, Carson

Wagonit Voyages, some 21,000 trave agencies and connections

to a GDS booking patforms.

In a, TARS accounts for 43% of hote revenue and more than

32.5 miion hote nights. Hotes aso receive reservations via the

34 saes offices that maintain cose reations with trave professionas.

TARS43%

dire

cts

ales 2

9%

indire

ct

sale

s1

4%

57%

16%

13%

7%

7%


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Online sales increasingrapidly, rising more than25% for the yearIn 2010, saes via the accorhotes.com

porta and the 13 brand websites rose

by 25%, accounting for 16% of tota Group

saes. Overa, the Accor sites recorded

183 miion visits, a 27%-increase compared

with 2009.

The innovations and advertising campaigns

depoyed by accorhotes.com and theramp-up of the individua brand websites

were among the years especiay

noteworthy deveopments. Visits to the

brand sites increased by 20% year on year

and generated 711 miion in revenue. This

strong growth was due mainy to the sites

enhanced content and functions. The

ibishote.com site, for exampe, was totay

reworked in September, saes on

novote.com rose by 21%, etaphote.com

received more than 9 miion visitors

and scored a record conversion rate of 9%

and the hoteF1.com site was brought

onine ate in the year.

E-commerce initiatives were aunched,

incuding targeted promotions and

a host of muti-brand and regiona saes

campaigns, such as Super Sae and Crazy

Prices in Asia, Latin America and Europe.Hed in June, the Crazy Prices campaign

enabed accorhotes.com to set a singe-day

record of 630,000 visits and generated

neary 25 miion in business voume

during the week-ong event.

Numerous initiatives organized by

individua brands aso heped to ift

business voume:

Mote 6 and Studio 6, with NationaSaes Fun Day, a teephone marketing

program that generated more than

$3.5 miion in revenue;

Novote, whose specia deas resutedin 500,000 hote nights;

Sofite, whose promotiona offersboosted revenue by 9 miion.

OF HOTEL REVENUE HANDLEDBY TARS, ACCORS CENTRALBOOKING SYSTEM

43% 16%OF 2010 SALES GE NERATEDONLIN E, 4 POINTS HIGHERTHA N IN 2009


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6

HOTELEXPERTISETHATMAKESALLTHEDIFFERENCE

Sales and marketing: a changingprofessionEmpoyees who manage and depoy saes toos are at the heart

of the system. Accor can rey on the expertise of 700 saes

professionas in 34 countries who manage 65,000 key accounts

and 500,000 contacts a year. And in 6 ca centers organized

by major market, 330 empoyees hande neary 3 miion cas

a year and over 300,000 booking requests received by fax

or e-mai. A new center has been opened in Daian, China, to

support the Groups deveopment if this fast-growing market.

To upgrade saes team skis and expertise, a new Saes &

Distribution Pass training modue was introduced see the

Human Resources section of this document, page 70.

Accorhotels.com sales up 34% in 2010Visits to accorhotes.com rose by 34% year on year. The hote porta

is avaiabe in 12 anguages through 27 country points of sae in order

to satisfy customer needs and preferences around the word. In 2010,

it became the No. 1 hote booking website in France with more than

8 miion visits a month.

New features incuded an optimized search and booking function

to make browsing easier and more enjoyabe. The new function

incudes a greater number of search criteria as we as a system for

managing hote dispays. The site aso features enhanced content and

services. Interactive maps have been added, aong with 800 videosof Group hotes and reguary updated tourist information about the

various destinations. Late in the year, Accor became the words first

hote group to post customer feedback on its booking porta through

a partnership with TripAdvisor.

In this way, Web users are provided with free and easy access

to traveers opinions directy on the presentation page of a Group

hotes in a countries excuding hoteF1, Mote 6 and Studio 6.

Customers aso receive an e-mai foowing their visit inviting them

to evauate the hote. At year-end 2010, more than 20,600 evauations

of 2,741 hotes had been received.

DOWNLOADS OF THE ACCORHOTELS.COMIPHON E APPL ICATION IN 2010

500,000A|CLUB MEMBERS

6 miionsMORE THANMORE THAN


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Record year forthe accorhotels.comapplication foriPhone: more than500,000 downloadsProviding visibiity, immediacy and

interactivity, new media enabe the Group

to forge a new type of reationship with

customers. The brands and the accorhotes.com porta are today ampy represented

on socia networks and mobie channes.

Content shared on the Groups Twitter

accounts and Facebook pages are activey

managed throughout the year. These new

highy responsive modes of communication

hep to meet a array of sometimes widey

differing objectives, such as deepening

reations with customers,

showcasing attractive

marketing offers,

deveoping a oca strategy

for certain hotes and

generay enhancing visibiity on the Web.

These toos are aso used to create coser

ties of a different sort with customers by

spotighting the Groups expertise and

creating specia events. Exampes incudethe various contests aunched on socia

networks by Etap Hote during the 2010

Tour de France and by a seasons for the a

seasons Tour, in which tens of thousands of

peope took part.

A new version of the accorhotes.com

appication for iPhone was introduced.

Smooth and intuitive, it enabes users

to view onine videos of the hotes, enter

criteria for quick and easy searches, and

record an A|Cub member number to earn

points. Eected Best Mobie Transactiona

Software at the E-Marketing Awards, the

appication was downoaded more than

500,000 times in 2010.

The rapidy expanding mobie channe,generated 7 miion in 2010, and Accor

estabished itsef as the eading hote group

in terms of mobie transactions. This saes

channe now accounts for more than

600,000 visits a month. In eary 2011,

two new accorhotes.com appications

for BackBerry and Samsung were added

to the brands ineup of mobie services.

re

sh

ma

dev

A|Club, an ongoing success with 90%satisfied customersThe satisfaction rate among A|Cub members stands at 90%.

More than 2 miion members joined the Accor oyaty program

in 2010, an average of 6,000 a day. At year-end 2010, the program

totaed over 6 miion members, ony two years after its

aunch. Internationa, muti-brand a

2010 Annual Report Accor

Documents

Transcript of 2010 Annual Report Accor