A TALE OF TWO HOTEL COMPANIES

Last week the accounts came out for two of our hotel and leisure investments: Intercontinental Hotel Group on Feb 20th 2018 and Accor Hotels, the following day. The key points are as follows: 

Intercontinental Hotels Group

* Profits increased by 14.7%.and dividend by 11.0% in line with expectations.

 * The main news is that the long-awaited management reorganisation by its new full time 

 CEO is now taking place and this should be reflected in much improved profits from 2019 onwards allied to the resumption of the capital dividends from the annual creation of cash surplus to requirements.

 Accor Hotels

 * Profits increased by 66.4%. Dividend remains the same pending the forthcoming

 disposal of 80% of the group’s property division which will finance the outstanding

 growth  of the company and further improve profits in 2019.

 * The range of Accor's activities in the hotel industry is unique with a range of brands

 catering for all prices, age groups and the provision of extensive concierge services,

 luxury home rentals and digital travel platforms.  

 * The  past year has seen the acquisition of the Orient Express, 26 hotels in Brazil and

  127 hotels in Australia.

Two sets of accounts being released within 24 hours of each other got me thinking how the two companies compared and what, if any, effect this had on their financial success. My thoughts: 

IHG is efficient, well organised, formal and is in the business of letting rooms. it caters primarily for business but not the growing luxury market or the travel hungry millennial market. 

It has a new CEO, former CCO Keith Barr,  which should see some welcome changes to improve what is a very good business.

Accor is also a very good business but slightly has the edge on IHG due to its emphasis on hospitality. Accor hotels are friendly, super efficient and makes guests feel incredibly welcome and that, in my experience, has always been the X factor that turns a good hotel great. Accor are truly in the hospitality industry, as I have experienced myself in the last 18 months in their hotels in London, Vancouver, Paris, Strasbourg, Biarritz and Ho Chi Minh City. I will soon be staying in their hotels in Moscow, Sochi and Warsaw so will report back.