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UPDATE 1-Accor posts 9 pct drop in Q2 sales as hotels hit

Published 07/16/2009, 12:22 PM
Updated 07/16/2009, 12:24 PM
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* Q2 hotel sales fall 11.1 percent

* Q2 prepaid services sales rise 0.5 percent

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PARIS, July 16 (Reuters) - French group Accor posted a 9 percent drop in second-quarter sales as the economic crisis weighed on its hotel business despite slight growth in its prepaid services division.

Accor said the figures, sightly ahead of analysts' expectations, reflected the global economic situation which it said remained extremely depressed.

It said it was cutting costs and scaling back capital expenditure in 2009 and 2010 but gave no new target figures.

Accor's hotels, which range from budget Ibis to top-of-the-range Sofitel, saw revenue decline 11.1 percent to 1.35 billion euros in the three months to June 30 from a year ago, the company said in a statement on Thursday.

Prepaid services sales, meanwhile, grew 0.5 percent to 233.6 million euros.

Total group sales were 1.79 billion euros, against an average expectation of seven analysts of 1.71 billion euros.

U.S. rival Marriott International on Thursday reported a 76 percent drop in second-quarter profit and cut its 2009 earnings forecast. The group has been forced to lower room rates to entice leisure travellers as business trips decline. Accor is cutting costs and spending to help weather a decline in demand for its upscale, midscale and U.S. budget hotels and is expanding into services such as payment cards and holiday vouchers to bolster its main hotel business.

The group is cutting 2009 spending on renovating hotels by 170 million euros to 315 million, lowering support costs by 80 million this year and 45 million in 2010, and reducing operating costs by 120 million this year.

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Accor has also allocated 100 million euros for possible acquisitions in its hotels business and a further 100 million for purchases in prepaid services. (Reporting by Marcel Michelson; Editing by David Cowell)

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