WHY INVEST IN GRAND MERCURE

Accorhotels Global DevelopmentAugust 2018

225/09/2018

Our roots, where do we come from ?

In 1997, Brazilian hoteliers, wishing to provide sophisticated locals with international hospitalitystandards respectful of their values, opened the first Grand Mercure in Sao Paulo. The brand thenblossomed across the globe to satisfy a growing desire to highlight cultural identities.

Why Invest In Grand Mercure – BRAND POSITIONING

Around the world, Grand Mercure revisits the singularity of each culture with a new eye,

surprising & inspiring our guests to rediscover the uniqueness of a culture.

Each of our hotel invites to a curated & contemporary local immersion in the country they are located, whilst guaranteeing premium

international standards.

Why Invest In Grand Mercure – BRAND POSITIONING

Grand Mercure

Is a universally local brand by nature

Grand Mercure

Adapts to each market whilst providing premium international standards

Each Grand Mercure is unique. It captures the local cultural codes

and way of life of the country to recreate experiences tailored to the

local cultural values and rituals.

Grand Mercure are established international upscale hotels. Each

hotel guarantees Premium International standards,

consistently.

Each Hotel reinterprets selected fundamentals of the country and

local culture or customs in a contemporary way, a signature style from being an international brand.

The identity of the brand is designed by the local teams in each country and is adapted to the local cultural specificities, in an effort to always

respect and celebrate the country’s cultural fundamentals and story.

The Brand Signature experience can be found across all hotels around the world, making it relevant for both the local and international

guests.

4Why Invest In Grand Mercure – BRAND POSITIONING

TODAY

51 HOTELS

11,796 Rooms

OBJECTIVE BY END 2021

90 HOTELS+12

15

8

Greater China

Australia

India

New Zealand

Middle East

Latin America

+2

AfricaSouth East and North East Asia

+6

11

+1

+6

23

4

8

Grand Mercure Network & Pipeline

OPERATING MODE

FRANCHISE

18%

MANAGEMENT CONTRACT

82%

Why Invest In Grand Mercure – NETWORK & PIPELINE5

Key Upcoming Openings

A significant potential for development globally

AFRICA MIDDLE EASTALGERIA, Majlis Grand Mercure Golden Palace, 130 roomsNIGERIA, Abuja, 115 roomsQATAR, Majlis Doha C-ring road, 283 roomsSAUDIA ARABIA, Mjlis Jeddah, 250 roomsUAE, Dubai Sheikh Zayed Road, 364 rooms

ASPACCHINA, Chengdu Pixian, 180 roomsCHINA, Guangzhou Zhujiang new town, 233 roomsCHINA, Qingdao, Pingdu, 230 roomsMYANMAR, Yangon Golden Empire, 175 roomsINDIA, Bengaluru at Gopalan mall, 206 roomsINDONESIA, Maha Cipta Bali Legian Resort, 268 rooms

GRAND MERCURE GUANGZHOU ZHUJIANG NEW TOWN – CHINA, OPENING - 2018

GRAND MERCURE YANGON GOLDEN EMPIRE -MYANMAR

6Why Invest In Grand Mercure – NETWORK & PIPELINE

GRAND MERCURE ZHENGZHOU WEST – CHINA

180 ROOMS7

Brand Flagships

825/09/2018Grand Mercure – Presentation TitleGRAND MERCURE JAKARTA KEMAYORAN – INDONESIA

483 ROOMS

Brand Flagships

925/09/2018Grand Mercure – Presentation TitleGRAND MERCURE MYSORE – INDIA

146 ROOMS

Brand Flagships

1025/09/2018GRAND MERCURE PHUKET PATONG - THAILAND

314 ROOMS

Brand Flagships

Grand Mercure – Presentation Title 1125/09/2018GRAND MERCURE WELLINGTON – NEW ZEALAND

114 ROOMS

Brand Flagships

12GRAND MERCURE SAO PAULO VILA OLIMPIA – BRAZIL

211 ROOMS

Brand Flagships

Around the world

13

Grand MercureYangon Golden Empire,

Myanmar-

Opened May 2018175 Rooms

Grand MercureSao Paulo Vila Olimpia, Brazil-Opened May 2018211 Rooms

Latest Openings

Why Invest In Grand Mercure – NETWORK & PIPELINE

Grand MercureGuangzhou ZhujiangNew Town,China-Opening Q4 2018255 Rooms

14

Upcoming Openings

Why Invest In Grand Mercure – NETWORK & PIPELINE

TASTE OF PLACE

All dimensions of the local food cultureare showcased: exciting signature dishes orbrews, reinvented street food, andtraditional welcome delights…… a revisited and inspiring local taste,endorsed by the locals.

Why Invest In Grand Mercure – KEY IDENTIFIERS

Brand Passions

16

SENSORIAL IMMERSION

Brand Passions

Grand Mercure harmoniously combinesand reinterprets local attitudes,atmospheres and settings to awaken allsenses.

Why Invest In Grand Mercure – KEY IDENTIFIERS

17

REVIVED RITUALS

Brand Passions

Each hotel embraces & revives selectedfundamentals shaping a culture:Important celebrations, a sense ofetiquette & daily rituals to (re)discover,moments of conviviality & quality familytime associated to cultural values…integrated into curated brand experiences.

Why Invest In Grand Mercure – KEY IDENTIFIERS

18

Every country of the world has its ownconception of well-being.

In its hotels, Grand Mercure embraceseach of them accordingly tonurture its guests beyond the doors of thegym and the spa…

LOCAL WAY OF BEING WELL

Brand Passions

Why Invest In Grand Mercure – KEY IDENTIFIERS

Facebook accounts YoutubeInfluencer Campaigns

Newsletters

China Campaign

刻火花一生改变A moment of spark, A lifetime of change

Brazil :

25 K followers

Hotel campaign:

Reach 150 K

19

A regional activation for enhanced relevance & reach (examples)

Social Media

Why Invest In Grand Mercure – COMMUNICATION

Opening of the Grand Mercure Vila Olimpia Sao PauloMore than 500 people attendance

facebook.com/grandmercurevilaolimpia9563 likes posts

Brand Partnerships with L’Occitane & Orfeu in Brazil

20

Local Partnerships & Activation to increase Brand Awareness & Nourish Brand Passions (examples)

PR, Events & Partnerships

Why Invest In Grand Mercure – COMMUNICATION

Figures as of June 2018

82 %

Middle East

85 %

INDIA

86 %

CHINA

88 %

MIS

84 %

PACIFIC86 %

LATIN AMERICA

87 %

UPPER SOUTH EAST ASIA

GRAND MERCURE AVERAGE RPS

86.3

High Reputation Score in Constant Progression Across the Network

21

Reputation Score YTD

Why Invest In Grand Mercure – PERFORMANCE

34

2825 25 24

19 1923

46 44 4239 37

24

FRA

NC

E

BEL

GIU

M

GER

MA

NY

NL

PO

LAN

D

UK

SWIT

ZER

LAN

D

BR

AZI

L

AU

STR

ALI

A

N. Z

EALA

ND

IND

ON

ESIA

SIN

GA

PO

RE

THA

ILA

ND

UA

E/S.

AR

AB

IA

EUROPE AMERICAS ASPAC MEA

Figures as of end 2017Base: people having stayed in paid-for accommodation in the last 12 months.Total awareness: The brand is known whether spontaneously mentioned or known when prompted

A strong awareness around 40% in 6 key markets

Total Awareness

Why Invest In Grand Mercure – PERFORMANCE

3126

42 4441

37 37 36 34

4651

3539

36

1621

33

16

37

16

41

TUR

KEY

PO

LAN

D

SWIT

ZER

LAN

D

FRA

NC

E

GER

MA

NY

BEL

GIU

M

ITA

LY

NL

UK

BR

AZI

L

USA

KOR

EA

CH

INA

AU

STR

ALI

A

IND

IA

IND

ON

ESIA

N. Z

EALA

ND

SIN

GA

PO

RE

THA

ILA

ND

MO

RO

CC

O

UA

E/S.

AR

AB

IA

EUROPE AMERICAS ASPAC MEA

Brand Margin® measures the financial premium which the brand name adds to the intrinsic value of the same hotel stay with an unbranded alternative. A Brand Margin® of 10€ means that « Consumers think it is worth paying on average 10€ more per night to stay with brand X compared to an unbranded equivalent ».

Brand Margin ® in €. Traveller representativeAs of end 2017

BRAND MARGIN® IN €

A powerful rate premium perception

Grand Mercure Brand Margin

Why Invest In Grand Mercure – PERFORMANCE

The central Reservation System (CRS) generates on average

66%Of a hotel’s room revenue

24

AccorHotels Distribution Solution

Accorhotels offers > 110 global distribution partnerships at best market conditions

Why Invest In Grand Mercure – PERFORMANCE

CALL CENTERS, INTRA HOTEL & CLUSTER SERVICES

32% DIRECT SALES

42%HOTELPMS

58%OF HOTELS’ ROOM REVENUE

COMES THROUGH ACCORHOTELS CENTRAL

RESERVATION SYSTEM

ACCORHOTELS.COM, BRANDS.COM, MOBILES SITES & APP

WEB PARTNERS (OTAS)

GDS / IDS

26% INDIRECT SALES

18%

20%

FOCUS ON WEB DIRECT

128,000Grand Mercure room nights

16%

16%

19%7%

Figures as of end 2017 – AccorHotels LUXE brands’ distribution

25

AccorHotels Distribution Performance

Why Invest In Grand Mercure – PERFORMANCE

10 14 18 25 32 4050

44,7

70

100110

2012 2013 2014 2015 2016 2017 S1 2018

Loyalty members worldwide

Le Club AccorHotels

FRS loyalty programme

Huazhu loyalty programme

A worldwide programme

17 brands

3,400 hotels in 93 countries

Free enrollment

100% web based program

Partnerships with major airline loyalty programmes:

Skyteam, One World, Star Alliance…

Americas17%

Asia-Pacific28%

Medite-rranean, Middle

East & Africa12%

Central & Eastern Europe

12%

France13%

Northern Europe

18%

>50 MILLION

MEMBERS WORLDWIDE

+23,000MEMBERS EVERY DAY

LE CLUB ACCORHOTELSREPRESENTS

30.6%OF HOTEL GLOBAL

REVENUE

Guest origin

160M

106M

AccorHotels Loyalty program

Why Invest In Grand Mercure – PERFORMANCE

THAILAND

2 GRAND MERCURE HOTELS

REVPAR INDEX: 100 TO 130

NEW ZEALAND

1 GRAND MERCURE HOTEL

REVPAR INDEX > 102

MADINAH

1 GRAND MERCURE HOTEL

REVPAR INDEX > 106

CHINA

3 GRAND MERCURE HOTELS

REVPAR INDEX: 100 TO 130

Figures as of May 2018. Source: STR

RevPar Index YTD

Strong Performace Compared to Competition, Across The Network

Why Invest In Grand Mercure – PERFORMANCE

AAA ultra city center location, historic conversion

WORLDWIDE

RECOMMENDEDNUMBER OF ROOMS

150 keys and more 150 keys and +

ROOM AVERAGE SIZE 28 – 36 sqm 28 – 36 sqm

TGFA / ROOM 80 – 90 sqm 80 – 90 sqm

RECOMMENDEDNUMBER OF ROOMS

120 keys and + 150 keys and +

ROOM AVERAGE SIZE 28 – 36 sqm + balcony30 – 40 sqm

+ balcony

TGFA / ROOM 80 – 90 sqm 80 – 110 sqm

FOOD & BEVERAGE

1 All day diningSpecialty restaurant(1)

1 lobby bar

WELL-BEING

Spa market drivenFitness centreSwimming pool

MEETINGS& OTHERS

Meeting roomsBallroomBusiness centre available

(1) Based on market demand

HO

TEL

RES

OR

T

PRIME LOCATIONS

SECONDARYLOCATIONS

AIRPORTSSUBURBS

INTERNATIONAL CAPITALS KEY CITIES & RESORTS

MAJOR DOMESTIC DESTINATIONS

OTHER CITIES & ATTRACTIVE TOURISTIC DESTINATIONS

NEW-BUILT AND CONVERSIONFRANCHISE CONTRACT

MANAGEMENT CONTRACT

Development Criteria

Why Invest In Grand Mercure – PERFORMANCE

THANK YOU