AccorHotels is blaming terrorist attacks in Europe—and France in particular—for a decline in profits over the first half of 2016. “People who have a choice between traveling to New York or traveling to Paris choose New York because they feel safer there,” AccorHotels CFO Jean-Jacques Morin said.
Morin said that sales in Nice have dropped 10 percent since the July 14 truck attack that killed 84 people. “The next three months are vital for the company as we make 35 to 40 percent of our profits in July, August and September,” he said.
Europe’s largest hotel operator, which earlier this month completed a deal to buy luxury hotel brands Fairmont, Raffles and Swisshôtel, said net profit dropped 23 percent to €74 million for the first six months of the year.
Revenue for the first half of the year reached €2.6 billion, a decline of 4.7 percent from the first half of 2015. The Wall Street Journal claimed that some of the drop could be blamed on the negative impact when international sales were translated to euros.
Earnings before interest and tax in France dropped 4.2 percent on a like-for-like basis as demand was lower in the wake of the November attacks, particularly in Paris, the company said. Revenue per available room was down 14 percent in the Paris region over the first half of the year.
But the company did have good news to share: Accor saw record development in the past six month, with the opening of 19,366 rooms, 90 percent of which are under franchise or management contracts.