ACCOR in China

ACCOR in China
Presented by
Brian Deeson
Senior Vice President Asia Pacific &
CEO Greater China
November 2006

China Travel Market
Highlights
• Domestic tourism receipts in excess of USD 66B (2005)
• Total receipts of tourism over USD 96B (2005)
• Total outbound 31M Pax of which 27.7M intra Asia (2005)
• Total outbound to Europe 1.8M Pax (2005)
• Total inbound 81.8M Pax of which 64.7M HK/Macau (2006 Jan – Aug)
• Total inbound Europe 3.4M Pax (2006 Jan – Aug)
Sources: China National Tourism Administration Website: www.cnta.gov.cn

Accor in China
• The first international hotel management company to enter China in 1985.
• All Accor hotels are situated in major metropolitan areas, gateway cities
and popular resorts.
• Operating under 5 brands: Sofitel, Grand Mercure, Novotel, Mercure and
Ibis.
• Currently operating 40 hotels in 21 cities, scheduled to open 57 hotels in
the next 30 months.
• Total annual revenues was 215 million USD in 2005 for China and Hong
Kong regions.

Financial Performance
As of 8 Nov 2006
2004
18 hotels
5,268 rms
2005
23 hotels
6,800 rms
2006
32 hotels
11,454 rms
Currently
OCC %
68%
66%
62%
Hotels in PRC excluding Ibis
REVPAR
45
46
46
Revenue (000 USD)
149,671
168,214
154,496
GOP (000 USD)
50,571
58,583
51,950
ARR (USD)
66
70
76

Financial Performance
As of 8 Nov 2006
2004
4 hotels
1,496 rms
2005
4 hotels
1,496 rms
2006
5 hotels
1,936 rms
Currently
OCC %
90%
88%
80.1%
Hotels in Hong Kong
REVPAR
56
62
61
Revenue (000 USD)
40,366
47,843
43,109
GOP (000 USD)
17,480
23,236
18,998
ARR (USD)
62
74
80.2

Greater China
(without Ibis)
LEGEND
Operating
Hotels
Opening
Hotels
Hohhot
Chengdu
Chongqing
Shijiazhuang
Xian
Hefei Nanjing
Tianmu Lake
Wuhan
Nanchang
Jinan
Zhengzhou
Suzhou
Shanghai
Hangzhou
Qingyuan
Xiamen
Guangzhou
Dongguan Shenzhen
Hong Kong
Macau
Haikou
Sanya Boao
Anshan
Qingdao
Pearl
River
Delta
Harbin
Baohai
Economic
Circle
Yangtze River
Delta

Greater China
(Ibis)
LEGEND
Operating
Hotels
Opening
Hotels
Tianjin
Jinan Qingdao
Zibo
Jiangyin
Xian
Deyang
Yaan Yibin
Chengdu
Chongqing
Yangzhou
Zhenjiang
Changshu
Nanjing Suzhou/Wujiang
Changzhou Shanghai
Xichang
Wuhan Wuxi
Hangzhou
Shaoxing
Zhongshan
Jiangmen
Hong Kong
Qiqihaer
Fuzhou
Shenyang
Harbin

Accor in China
As of 8 Nov 2006
Sofitel (18 – 5,431 rooms)
Sofitel Boao (437)
Sofitel Hyland Shanghai (370)
Sofitel Jin Jiang Orient Pudong Shanghai (549)
Sofitel Silver Plaza Jinan (326)
Sofitel Wanda Chengdu (262)
Sofitel Westlake Hangzhou (200)
Sofitel Zhengzhou (241)
Sofitel Grand Park Hefei (261)
Sofitel Royal Lagoon Dongguan (268)
Sofitel Royal Lagoon Executive Resort (133)
Sofitel Plaza Xiamen (393)
Sofitel on Renmin Square Xian (432)
Sofitel Zhongshan Golf Resort Nanjing (140)
Sofitel Galaxy Nanjing (278)
Sofitel Xanadu Resort Hangzhou (301)
Sofitel Fizi West Coast Hainan (304)
Sofitel Trilec Nanchang (186)
Sofitel Suzhou (350)
Operating Hotels (40 – 12,104 rooms)
Grand Mercure (4 – 1,382 rooms)
Grand Mercure on Renmin Square Xian (202)
Shenzhen Oriental Ginza Hotel (481), rebranding
to Grand Mercure Oriental GInza in Nov 2006
Shanghai Baolong Hotel (372), rebranding to
Grand Mercure in Jan 2007
Grand Mercure Shijiazhuang (327)
Novotel (10 – 3,466 rooms)
Novotel Atlantis Shanghai (303)
Novotel Peace Beijing (337)
Novotel Xinqiao Beijing (700)
Novotel Hefei (245)
Novotel Watergate Shenzhen (152)
Novotel Bauhinia Shenzhen (200)
Novotel Xinhua Wuhan (303)
Novotel Century Hong Kong (512)
Novotel Century Harbourview Hong Kong (274)
Novotel Citygate Hong Kong (440)
Mercure (1 – 111 rooms)
Mercure on Renmin Square Xian (111)
Ibis (4 – 860 rooms)
Ibis Tianjin (222)
Ibis Chengdu (256)
Ibis Qingdao (172)
Ibis North Point, Hong Kong (210)
Other Hotel (3) – 854 rooms
Headland Hotel, Hong Kong (500)
The Panorama Shanghai (192)
Century Run Hua Hotel Jinan (162)

Accor in China
As of 8 Nov 2006
Sofitel (13 – 4,603 rooms)
Sofitel Riverside Qingyuan (2006, 360 rooms)
Sofitel Lakeside Resort Hefei (2007, 162 rooms)
Sofitel Wanda Beijing (2007, 453 rooms)
Sofitel Wanda Harbin (2007, 338 rooms)
Sofitel Macau @ Ponte 16 (2008, 420 rooms)
Sofitel Guangzhou (2008, 451 rooms)
Sofitel Anting New Town (2008, 450 rooms)
Sofitel Sheshan Resort Shanghai (2008, 450 rooms)
Sofitel Financial Center Nanchang
(2008, 399 rooms)
Sofitel Qiandao Lake Resort Hangzhou
(2008, 220 rooms)
Sofitel Fizi Tianmu Lake (2008, 400 rooms)
Sofitel Forebase Chongqing (2008, 230 rooms)
Sofitel Qingdao (2008, 270 rooms)
Grand Mercure (1 – 200 rooms)
Grand Mercure Yalong Bay Resort & Spa, Sanya
(2008, 200 Villas & Suites)
Opening Hotels (57 – 14,168 rooms)
Novotel (6 – 2,046 rooms)
Novotel Baiyun Airport Guangzhou
(2006, 460 rooms)
Novotel Anshan (2007, 306 rooms)
Novotel World Trade Nanjing (2008, 250 rooms)
Novotel Beijing West (2008, 318 rooms)
Novotel Beijing Phoenix City (2008, 312 rooms)
Novotel Nailun Hohhot (2008, 400 rooms)
Mercure (1 – 198 rooms)
Mercure Suzhou Park Hotel & Suites
(2007, 198 rooms)
Ibis (35 – 7,069 rooms)
Ibis Wuhan (2006, 243 rooms)
Ibis Wuxi (2006, 216 rooms)
Ibis Chongqing (2007, 150 rooms)
Ibis Zhongshan (2007, 150 rooms)
Ibis Jinan (2007, 200 rooms)
Ibis Hangzhou (2007, 200 rooms)
Ibis Xian (2007, 220 rooms)
Ibis Changshu (2007, 190 rooms)
Ibis Yangzhou (2007, 170 rooms)
Ibis Shenyang (2007, 322 rooms)
Ibis Yaan (2007, 144 rooms)
Ibis Yibin (2007, 125 rooms)
Ibis Chengdu Kehua (2007, 192 rooms)
Ibis Tanggu (2007, 168 rooms)
Ibis Jiangmen (2007, 198 rooms)
Ibis Tianjin Dabeiyuan (2007, 152 rooms)
Ibis Zibo (2007, 220 rooms)
Ibis Shanghai Lianyang (2008, 311 rooms)
Ibis Shanghai Jiading (2008, 160 rooms)
Ibis Beijing Phoenix City (2008, 409 rooms)
Ibis Chengdu Expo Center (2008, 150 rooms)
Ibis Chengdu Xinnanmen (2008, 308 rooms)
Ibis Deyang (2008, 159 rooms)
Ibis Zhenjiang (2008, 208 rooms)
Ibis Suzhou (2008, 200 rooms)
Ibis Wujiang (2008, 160 rooms)
Ibis Fuzhou (2008, 230 rooms)
Ibis Shaoxing (2008, 150 rooms)
Ibis Jiangyin (2008, 150 rooms)
Ibis Beijing Beiyuan (2008, 288 rooms)
Ibis Changzhou (2008, 150 rooms)
Ibis Liangshang Xichang (2008, 120 rooms)
Ibis Nanjing (2008, 297 rooms)
Ibis Harbin (2008, 212 rooms)
Ibis Qiqihaer (2008, 147 rooms)
Other Hotel (1 – 52 rooms)
PuDi Boutique Hotel Fuxing Parc Shanghai
(2007, 52 rooms)

Accor in China
HOTEL GROWTH CHART - From 1999 to 2008 (projected)
100
90
80
70
60
50
40
30
20
10
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Brand Positioning
Deluxe (5* & Luxury)
Business (4-5*)
Business and Leisure (3-4*)
Economy
Level of service
Ibis
Novotel
Mercure
Grand Mercure
Economy Comfortable Luxury
Sofitel

Development
Business and Leisure Brands
Key Objectives (2005 - 2007)
• Secure flagship Sofitel and Novotel properties in major hubs – Shanghai, Beijing,
Hong Kong, Macau and Taipei
• Secure and resign existing agreements
• Be “first to market” in secondary and tertiary cities
• Expand the Mercure brands through the acquisition of local “chain” hotels
• Pursue airport hotels as this sector expands
• Find a brand for the emerging serviced apartment market

Development
Business and Leisure Brands
Our Strategy
• Primarily management not investment.
• Accor has four Business and Leisure brands that are undergoing balanced
development.
Sofitel / Novotel: Provincial cities, major commercial centers, first-tier cities,
second-tier cities when the property has potential to be the best hotel in town.
Grand Mercure / Mercure: New build / takeover of either relatively new property or
older hotels with sufficient renovation budget
• Our main competitors are the international hotel chains.

Development − Ibis
• Invested Product
• Local Authorities
Local authorities are keen to attract foreign investment, and our good relationship
with them has enabled us to purchase land from the government bodies for our
projects in Sichuan and Jiangsu provinces.
• Selection Criteria
We judge the market based on factors such as size, population, economic power
and growth, tourists and business guests, and hotel competition. We then evaluate
the site by based on visibility, accessibility and trade area. Finally, we consider the
price including market value and our affordability.
• Our Development Strategy
Direct Development: We purchase the land directly and construct by ourselves.
Design & Build: Co-operate with local promoters in their multi-purpose projects
including apartment, retail, and hotels. Almost all the local promoters are
Chinese. We discuss with them to find the feasibility and convince them to accept
our concept by settling various levels of difficulties and problems.

Accor in Greater China
As of 8 Nov 2006
All Brands
No. of Hotels in Greater China
by Province − 40
2
3
2
5
1
1
1
1
3
2 3
1
5
2
2
5
1

Accor in Greater China
As of 8 Nov 2006
All Brands
By 2008
No. of Hotels in Greater China
by Province − 97
9
2
1
4
1
2
10
3
1
1
2
6
3
15
2
5
5
2
3
7
3
10

Where We Are vis-à-vis
our Competitors
Starwood Four Points will target Novotel. Meridien taking the French "high
ground" and targeting Sofitel.
IHG New JV to develop Holiday Inn Express pitched between Ibis and
Novotel. Crowne Plaza expanding rapidly. Flagship InterContinental
in Hong Kong.
Marriott Courtyard aims to target Novotel. Renaissance positioned as a
"European" brand.
Cendant Howard Johnson developing as a franchise model targeting 4-5 star
market.
Hilton Following acquisition of Hilton International will introduce US based 3
and 4 star brands to China.
Shangri-La Focusing on Traders in secondary and tertiary cities.

Where We Are vis-à-vis
our Competitors
Accor
Marriott
Starw ood
Shangri-La
Hyatt
Sofitel Novotel
Grand
Mercure Mercure & Others Ibis Total Apprx. Rms
18 10 4 4 4 40 12,104
Ritz-Carlton JW Marriott Marriott Renaissance Courtyard Marriott Total Apprx. Rms
2 2 12 9 6 31 12,465
St. Regis W Westin Sheraton Four Points Total Apprx. Rms
2 0 2 18 4 26 10,001
Grand Hyatt
3
Shangri-La
18
Traders Hotel Total Apprx. Rms
5 23 11,319
Park Hyatt Hyatt Regency
Total Apprx. Rms
0 8
11 4,865
Carlson Regent Radisson
Park Plaza Total Apprx. Rms
1 5
1 7 2,759
Sources: Hotel group websites August 2006

Our Local Competitors
Jin Jiang International Hotel Management Co. Ltd.
As a part of the wider Jin Jiang International Group which also includes Jin Jiang
Travel and Jin Jiang Transport, it is the largest Asian-owned hotel group, with
more than 60 hotels and 140 inns operating or under development in 59 cities of
25 provinces and municipalities. Jin Jiang operates and manages hotels from
economy hotels (Jiang Jiang Inn) all the way to 5-star hotels.
Beijing Tourism Group
BTG is to build a hotel operation system that is compliant with international
practice and combines reasonably arranged hotels of different grades. The total
number of hotels invested and management by BTG will exceed 200, including
nearly 10 five-star hotels managed by Key, 56 three and four-star hotels by BTG
Jianguo, and over 120 economic hotels by Home Inns and Shindom.

Our Local Competitors
Gloria International Hotels
Gloria International Hotels currently manages 16 hotels throughout China
under 4 different brands – Gloria Inns, Gloria Plaza Hotels, Gloria Grand
Hotels and Gloria Resorts. The company manages a total room inventory in
excess of 4,500 rooms in the capital, major and secondary cities in China.
The next phases of development spawned properties in southern China and
the rapidly developing cities along the Yangtze River.
Motel 168
Motel 168 Chain Hotel is run by Shanghai Merrylin Hotel Management Co.
Ltd. There is a total of 23 Motel 168 and 268 spreading all over Shanghai.
The group is now stepping out of the Shanghai territory with their first motel
established in Ningbo and future plans in Beijing.

Multiple Properties Ownership
• BTG / Beijing Tourism Group
• Hotel: Accor manages Novotel Peace Beijing since April 2000 and
Novotel Xinqiao Beijing since 2001.
• Travel Agency: BTG – Accor Travel JV is responsible for inbound
business and started to cover outbound business in 2004.
• Wanda Group
• Hotel: Accor manages Sofitel Wanda Chengdu since August 2000.
Meanwhile, Accor will manage Sofitel Wanda Beijing that is scheduled to
open in 2007. Third hotel Sofitel Wanda Harbin is under discussion.
• Group FIZI
• Hotel: Accor has signed “Head of Agreements” on 2004 to manage 5
Sofitel Resorts. Sofitel FIZI West Coast Hainan just opened in October
and Sofitel FIZI Tianmu Lake is scheduled to open in late 2008.

Human Resources
Aggressive growth plans of Accor and competitors are exerting pressure on labor market
NUMBER OF HOTELS IN CHINA
38
100
ACCOR
25
75
STARWOOD
54
80
INTERCONTINENTAL
2006
By 2010
80
140
HOME INNS
• Increased demand in
overall labor in the
hospitality industry
• Significant demand
on experienced,
trained staff to
support aggressive
growth plans
• Competition not only
for customers, but
also staff

Human Resources
Ensuring Accor’s attractiveness to attracting staff becomes
critical in allowing future growth
Aggressive
industry growth
General shortage of
talents
Aggressive
New opening plans
Decreasing sense of loyalty
Rising compensation
Shortage of
skilled staff
How to ensure that there are
sufficient skilled staff to fuel
planned growth?
• How to attract skilled staff
from the labor market?
• How to retain skilled Accor
staff from competitive
poaching?
Context

Human Resources
Accor China
HR Strategy
Inexperienced
Young Person
TRAINING
Experienced
Person
ACCOR
POOL
We need to to recognize talents
--Looking Looking for for the people for for the
right jobs and at at times we need
to to beg for for talents, not on on our
knees but actively sought out and
create strong pull factors,
marketing the various prospects
and cultivating relationships

Human Resources
Talents must be be valued and
treasured. We need to to continue
to to train them, trust them and
respect them for for their inputs
Inexperienced
Young Person
Train
Experienced
Person
ACCOR
POOL
HOTEL
SPECIFIC
TRAINING
ACCOR
UPGRADING
COURSE
HOTEL
UPGRADING
COURSE
ACCOR
POOL

Human Resources
Talents must also be be cultivated,
groomed and promoted. Some are
raw diamonds and they
need to to have opportunities
Training for for
Certification
and
Job Readiness
Upgrading
Training for for
Advancement
Exposure
Training for for
Advancement
Career
Fulfillment

Human Resources
Managing the talents and
synergize them is is an an art art just like
a football team, not all all are star
forwards. Relationships is is
important and the final step to to
retain the talents, challenging
We may lose some but we know
they will build pipelines for for us us
Training for for
Certification
and
Job Readiness
Upgrading
training for for
career growth
Upgrading
training for for
knowledge gain
Upgrading
training for for job
skills and job
security

Human Resources
Objectives
• Develop a higher awareness of who we are and what we
can offer.
• Attract with different type of recruitment tools and making
use of our own employees as the models for the reality of
the jobs

Human Resources
• R&F staff
• Supervisors
Which medium to use to reach each target ?
Recruitment Target Medium of Recruitment
• Management level
• Foreigners (trainee / expat)
• Special or sensitive case
• In-house notice board / word of mouth
through existing hotel staff
• China Jobs Flash / external word of
mouth to sister hotels staff
• Job market and job fair
• Schools and universities
• Newspaper advertisement
• Web sites advertisement
• Head hunters

2008 Olympic Games
in Beijing
Presented by
Gerhard ZImmer
General Manager Delegate Beijing
November 2006

Business Outlook
for 2007
Year 2007 all China WTO promises will be implemented with high GDP
increase (will grow steadily by 7.5% annually in the next five years) and
China will become the number one destination of Asia.
The outlook on China's tourism market remains positive. According to the
World Travel and Tourism Council, China's travel and tourism demand is
expected to grow at an annualized rate of 3% until 2014.
China plans to completely deregulate the sector and grant access to wholly
foreign-owned travel agencies with effect from 11 December 2007 without
any further geographic restrictions.

Business Outlook for 2008
and beyond
For the 2008 Summer Olympic Games, Beijing expects to spend almost
$40 billion on new stadiums, subways and a new airport terminal.
Global companies are aiming to tap Olympics-related building boom to
bolster business in the country; Many view Olympics as a great chance to
forge new relationships with major Chinese business and government
figures. Few to quote: GE Co., Siemens AG and United Technologies
Corp.
Recent studies with statistics showing China is moving neck to neck with
the global averages on relationships with all sports related events.

Impact on Accor Hotels
The 2008 Olympics is the greatest exercise that will bring major impacts
to tourism in Beijing as well as China;
Market forecast: the average occupancy will increase 10 -15% in 2007
and 30% in 2008;
All the new opening Accor hotels in Beijing, or even in other parts of
northern China (e.g. Harbin, Shijiazhuang), can enjoy immediate boost
on occupancy;

Impact on Accor Hotels
The existing hotels (NV Xinqiao BJ and NV Peace BJ) and 2 hotels opening in
2007 (SF Wanda BJ, NV Beijing West) have been solidly booked for the BJ
Olympic Games through the Olympics Head Committee:
NV Xinqiao BJ – Headquarter of French National Team
NV Peace BJ – Headquarter of Australian National Team
SF Wanda BJ – Sports Organization Companies, Direct Corporate
Clients, Major Sponsors
NV BJ West – French Media
NV and Ibis Phoenix – Since the hotels will be opening only a couple of
months before the Olympics starts, these 2 hotels are not likely to be
ready for advance booking

Beyond the Olympics
Predict there is a slight adjustment but not a dramatic drop
because:
Right after the Olympics, it will be the high season for tourism
in Beijing (Sep – Nov). Forecast drop in winter: around 15%
There is an increase trend for foreign visitors coming to
Beijing. Therefore, after the Olympics the occupancy for 4-5 star
categories will stay at normal growing pattern

Thank You