Open New Frontiers in Hospitality Yugi Chen

Thang HuynhKristi Kaarlop

Audrey RobertsSamat Teberdiev

Agenda

Company Presentation

Interview with Associate Director of Sales

Summary

Questions

Company Values

Innovation is our trademark

The spirit of conquest is our growth engine

Performance is the key to our continued success

Respect is basis of all our relationships

Trust is the foundation of our management

History of the Company 1967 First Novotel

opens in Lille Lesquin.

Creation of Novotel – SIEH by Paul Dubrule and Gérard Pélisson.

Lille Lesquin

1974 First ibis opens in Bordeaux

1975 Acquisition of the 3-star chain, Mercure.

History of the Company 1980 Acquisition of Sofitel, the jewel of 4-star French

hotels.

1983 Creation of Accor, the new entity counted 440 hotels, 1,500 public or institutional restaurants, 35,000 employees, & a presence in 45 countries.

1985 Creation of Formule 1, a new budget chain. Creation of Accor Academy, France’s first corporate university for service activities.

1990 Acquisition of the Motel6 chain in the United States. Lenôtre becomes an Accor brand.

1991 Compagnie Internationale des Wagons-Lits et du Tourisme (CWL) joined Accor.

The Etap Hotel chain added another economy hotel to the market.

History of the Company 1999 Accor created the Suitehotel concept: the concept

offers 30sq.m. suites

2000 The Accor real-time reservation website goes online: accorhotels.com.

2002 Opening of the Sofitel Chicago Water Tower and 13 other Sofitel establishments in major international cities. Accor Services acquires Australian HR consulting firm, Davidson Trahaire.

2003 The first Ibis opens in China, in the city of Tianjin.

2004Creation of Groupe Lucien Barrière SAS. Owned 34% by Accor.

2005 Opening of the 4,000th hotel, the Novotel Madrid Sanchinarro.

History of the Company 2006 Sofitel opens a new flagship hotel--the Sofitel Los Angeles.

A major hotel expansion program is rolled out in India to open 5,000 Sofitel, Novotel, Mercure, ibis and Formule1 rooms within 5 years.

Accor launches Pullman, a new upscale brand dedicated to business travelers.

2008 Creation of MGallery: a new collection of upscale hotels with a marked personality. Etap Hotel, the leader in the budget segment, opens its 400th hotel in Europe . Accorhotels.com available free of charge on iPhone. Accor announces a major real estate transaction in the Budget segment in France, with the sale of 158 hotelF1 properties for €272 million.

2010 Demerger of Accor’s Hotels and Accor Prepaid Services businesses; Accor Services becomes Edenred.

History of the Company The Suitehotel brand now joins the Novotel family,

boasting a new name, Suite Novotel.

A|Club celebrates its 2nd anniversary with its nearly 5M members .

Accor will have 100 hotels operating in Greater China after 25 years.

TripAdvisor customer opinions are now posted on the website.

All Seasons: already 100 hotels in just 3 years!

2011 UK: Mercure expands with ten new franchised hotels.

Accor celebrates 25 years of the hospitality industry’s largest corporate university

History of the Company ibis: already 900 hotels throughout the world!

MGallery opens its first hotel in London

Adagio acquires Citéa and becomes the European no.1 in the extended stay segment

Amsterdam : inauguration of the first Sofitel Legend in Europe

Accor wins the Recognition and Commitment prize at the 2011 Human Capital Trophy

Accor’s commitment and responsibility rewarded three times with the World Savers Awards

Opening of the World's first ibis budget Hotel in Tangier, Morocco

Accor: Le Card

Organization

Global HQ:Immeuble Odyssey110, Avenue de France75210 Paris Cedex 12,

FranceMain: +33 1 45 38 86

26

Corporate Office:Accor North America4001 International

ParkwayCarlton, TX Main: 972-360-9000

Organization

Denis Hennequin Yann Caillere

Greg Champetier

Dominique Esnault

Chairman and CEO

President and Chief Operating

Officer

Global Chief Marketing Officer

Global Chief Operating Support

Organization

Pascal QuintAntoine Recher Sophie Stabile

Marc Vieilledent

Corporate Secretary

Global Chief Human

Resources Officer

Global Chief Finacial Officer

Global Executive VP Asset

Management

Board of Directors

Denis Hennequin: Chairman and CEO of Accor Jean-Paul Bailly: Chairman and CEOof the La

Poste Group Thomas J. Barrack: Chairman and CEO of Colony

Capital Sébastien Bazin: CEO of Colony Capital Europe Philippe Citerne: Chairman of Télécom & Mgmt

SudParis Mercedes Erra: Executive President of Euro

RSCG Sophie Gasperment: Executive Chairman of The

Body Shop Bertrand Meheut: Chairman of the Groupe

Canal Virginie Morgon: Executive Board Member of

Eurazeo Franck Riboud: Chairman and CEOof Danone Patrick Sayer: Executive BoardChairman of

Eurazeo

Stock Information

Ticker: AC

Exchange: NYSE Euronext Paris

Price: €24.60/$30.77

Market Cap: $8.13 B

#1365 on Forbes Global 2000

As of April 2012 sales is 7.9B

Is confident in boosting dividends in 2012

Stock Information

Among Accor shareholders are a French investment firm and an American real

estate investment firm.

Top 5 US Markets/CountriesEurope region contributes the largest share of

revenues.

Hotel Stats- YE 2011

4,426 Hotels/531,714 rooms in 90 countries

€6.1B in Consolidated Revenue

€27 M in Net Profit

€433M in Operating Profit before Tax and Non-recurring items

€4.5B Market Capitalization

Hotel Stats- Summary

Hotel Stats- Region

Hotel Stats- Brands

Hotel Stats- Region

Number of Hotels and Location

Competitive StrengthsStrong Brand and Marketing

• Full range of hotel offerings caters to all customer/market segments

• Effective loyalty program launched in September 2008. A|Club has 6 million members.

• Recognized trong brand: Sofitel, Mecure, Ibis, Motel6

Competitive StrengthsStrong Booking, Distribution System, Sales

Team• Centralized booking system: Travel Accor

Reservation System (TARS)• TARS connects connects to wide range of

distribution channels-web, 6 call centers, partners, network of distribution partners worldwide.

• 43% of consolidated revenue booked through TARS

• Accorhotels.com—the online sales generated 23% of hotel revenues.

• 34 sales team offices managing over 500 strategic accounts

Competitive StrengthsFocus on Employee Training

• 17 Accor Academies• Training takes place at academies, online and

at the hotels themselves.• Awarded the 2011 Diversity Training award

for e-learning training on diversity management.

Competitive StrengthsCentralized Purchasing Reduces Costs

• 200 buyers worldwide based in 20 countries• Consistent brand standards and quality while

complying with local regulations• 100 product families• Buying power reduces costs• Can be flexible in providing global solutions

or addressing local market needs.

Financial Information Accor has increased their profits 18.8% over

the past year

Europe’s largest hotel operator – 70 % of sales come from Europe

Accor shares have gained 34% this year – business held up despite faltering European economy

Revenue Streams

Europe region contributes the largest share of revenues.

Revenue Streams

Upscale & Midrange brands contributes the largest share of revenues.

Assets

$6B in Assets Owned.

Managing Company

Accor manages their owned and leased hotels.

They manage over 2,700 hotels through owned or leased properties and management contracts.

Purchasing and Funding of Hotels Financing through banks or through the issue of

billets de trésorerie (commercial paper) in France and bonds in both French and international markets.

Finance assets and operating requirements in local currency to provide a natural hedge and avoid currency risk.

Also using cash from dispositions to fund hotel acquisitions.

Fitch and Standard & Poor’s Debt Rating: “BBB- Outlook Stable Rating”

Own a Franchise

Franchisor for 45 years

Over 1,100 franchises in North America

Wide variety of brands to choose from

Price: 795 to 3300/room for the entrance fee, annual royalties from 5- 8% of revenue, cost of bringing the hotel up to brand’s standards.

2011 – opened 318 hotels worldwide (38,600 rooms)• 54% franchise

agreements• 46%mid & upscale

brands & 54% economy

• 33% in Asia Pacific Region

Other Businesses

In 2010, the company divested its other businesses.

RESTAURANTS

TRAVEL AGENCES

ONBOARD RAILWAY SERVICES

CASINOSTHALASSA

INTERNATIONAL SPA

Other Businesses

The Divestiture Process

Other Businesses

Restaurants

Over 6,000

Lenotre Pizza del ArtE

BOEUF JARDINIERCAFÉ ROUTE

ACTAIRTERMINAL

MEDA’S GRILLSSeafood broilerFrance Quick

Free-timeL’arche L’ecLUSE

Travel Agencies

Over 1,000

Carlson Wagonlite travel agency

Africatours

Americatours

Asiatours

Other Businesses

Other Businesses

As of September, 2011, Accor is a “100% hotelier”.

New Projects

The hotel plans to open609 hotels and 104K rooms

78% of expansion will be through management contracts and franchises.

45% of Accor’s development will be in Asia-Pacific1. 100 new hotels in China in the next 2-3 years2. 20 new hotels in Indonesia in the next 2-3 years3. Acquired 6,100 rooms with acquisition of Australia

hotel company Mervac in 2011

23 new hotels in the Middle East in the next 3 years

New Projects

New Projects- Frankfurt Sofitel at Alte Oper, Frankfurt/Germany: The

150-room luxury hotel will open in autumn 2014

New Projects- Dubai

Sofitel on Sheikh Zayed Road, Dubai/UAE: The 582-romm luxury hotel will open in the summer of 2012.

New Projects- Hainan Sanya Sofitel Resort

Hotel & Villas, Hainan/China: the hotel comprised of 488 rooms, suites, and villas will open in the fall of 2012.

Hotel Ratings: Sample

Number of Employees

Number of Employees: 145,000 in 90 countries

Employee Benefits

Employee Benefits Birthday paid day off

Carte Bienvenue

Guest for a night

Anniversary Bonus

Academic Accor: in house training academic

Employee Awards: Employee of the Quarter/Year

Employee Facility: staff lounge and changing room

Community: Foundation

“Linking cultures and providing support for the development of individuals and their

integration into their environment”.

Community: Foundation Accor Foundation created in 2008

Supports projects proposed by employees

http://www.fondation-accor.com/en/

Community: Foundation

Community: Foundation

Community: Local Know-How

Community: Training & Insertion

Community: Humanitarian and Insertion

LEED Certified

Motel 6 in Dallas, TX: first Accor hotel in

the USA to earn LEED certification

Clean, renewable wind energy powering all 9 Sofitel properties in

the U.S.

Environmental Policy Global Reforestation Project (over 2 million

trees planted already)

Earth Guest Program

Plant for the Planet Initiative

Planet 21: 7 Pillars and 21 Commitments

Environmental Policy Plant for the Planet

“5 towels reused = 1 tree planted."

The Project invests 50% of laundry savings generated by towel use when a guest stays longer than one night, sign says

Environmental Policy

Earth Guest Program

Was launched in 2006, with the motto:

“THE EARTH IS OUR HOST. WE

HOST THE WORLD.”

Environmental PolicyTo enhance performance Accor reaffirmed its

commitments with a new sustainable development program PLANET 21.

Environmental PolicyPLANET 21 is built on seven pillars – Health ,

Nature, Carbon, Innovation, Local, Employment and Dialog – and expresses 21 commitments.

7 Pillars & 21 Commitments

Environmental Policy

• Clean environment• Well rounded meals• Disease prevention

•Reduce water consumption•Recycling Programs•Protecting Biodiversity

•Reduced energy consumption•Reduced CO₂ emissions•Renewable Energy Sources

Environmental Policy•Eco design•Sustainable building•Hotel offers and technologies

•Protect children from abuse•Responsible purchasing practices•Protect ecosystems

•Support employee growth & skills•Diversity an asset•Improve quality of work life

•Conduct business openly•Engage franchised & managed hotels•Share commitment with suppliers

Brands

Partnerships

Reciprocal discounts for car rentals for hotel guests and vice versa.

Partnership between Air France loyalty program Flying Blue and A|Club where members of both can convert points

Customers of the French train company get a 10% or 5% discount at Accor hotels.

Partnerships

Hotel discounts when high speed train ticket and rooms are booked together in the four countries where Thalys operates.

Customers of the Belgian train company get a 10% or 5% discount at Accor hotels.

Provides WiFi access at French Accor hotels.

Partnerships

Software are provided in business centers and Xbox in certain hotel lobbies.

LCL loyalty provides free hotel stays as a reward.

Premium Mastercard customers get special offers from time to time.

Partnerships

Accor has sponsored the Evian Masters women’s golf tournament since 2006.

Nespresso coffee is exclusively served in Pullman hotels.

This French international news channel is shown in many Accor hotels.

Partnerships

The French programming channel is shown in most Mercure, Novotel,Pullman and Sofitel hotels around the world.

Strategy

Strategy

Bolster and Modernize Brands• Model reposition luxury brands – modeled

after Sofitel• New brand architecture for economy hotels

worldwide

Strategy

Build the the Accor corporate brand• Accorhotels.com- direct sales• A|Club rebranded Le Club Accorhotels• “Open New Frontiers in Hospitality”

Strategy

Reduce capital needs and cash flow volality• 2010 to 2012: Dispose of 450 hotels• Reduced adjusted debt by 1.2B in 2011-2012• 2013-2015- Dispose of 175 more hotels• Reduced adjusted debt by 1.0B in 2011-2012

Strategy

Development Growth• Open 40,000 rooms a year in 2012 and 2013• Acquisitions account for 5k rooms a year• 80% of development plan done through

management contracts and franchise agreements

• Strong focus in developing countries especially Brazil, India and China.

Interview

Ms. Joselyn Munoz

Associate Director of Sales Sofitel San Francisco Bay

Direct Tel: 650-508-7145E-mail: Joselyn.Munoz@sofitel.com

Individual Corporate & Negotiated ratesElectronic Arts Account

Interview

Interview

Hotel Sofitel San Francisco Bay223 Twin Dolphin Drive , Redwood City

Interview Questions

Education & Background

Sales and Marketing Organizational structure

Does the company promote from within and does it have a managerial training program

What is the hotel’s competitive set. Do you price rooms based on your competitive set?

What are the biggest challenges in your job?

Do you have an internship program?

Interview Questions

How many people work in the hotel?

How big is the meeting space in the Sofitel?

Do you do more meetings or weddings?

Do you use corporate or your own marketing?

What is your occupancy like?

What are your major budget variables?

Interview

Accor in the News

To implement improved standard competitive with other top tier brands

Stratified itself into three tiers with two new brands, the highest being Sofitel Legends, their flagship palace properties

Future Outlook

Become the European franchise leader.

Become one of the world’s three leading hotel operators.

Summary

Open New Frontiers in Hospitality Yugi Chen

Thang HuynhKristi Kaarlop

Audrey RobertsSamat Teberdiev