Will Investment Funds Transform Hotel Group Accor into an Empty Shell?
The decision taken by the Board of Directors of the Accor group to proceed with the plan to split the group into two separate listed companies is the latest of a series of decisions being driven by financial investors which may change one of the largest employers in the hospitality sector into an empty shell.
At the meeting of the Accor European Works Council (EWC) in October 2009, IUF-affiliated unions representing Accor employees expressed reservations about the policy promoted by the two private equity funds Colony Capital and Eurazeo since their arrival in Accor’s capital in 2005. The policy aimed at delivering more cash to shareholders is based on the sale of real estate and a strong move from fully-owned properties to managed or franchised ones. Splitting the group into two and depriving therefore the hospitality activity of financial resources derived from the services activity is seen as another step towards shifting employment responsibilities from the Group to individual licensed or franchised owners.
It may mean in the short and middle-term a loss of benefits for a large part of Accor employees in Accor-branded hotels, not to mention possible restructuring that could lead to job cuts. With this in mind the Accor EWC adopted a statement expressing the worries of trade unions representing Accor employees. The French group’s Committee also adopted a joint viewpoint publicizing their reservations about the planned spin-off.