AccorHotels buys concierge group to counter Airbnb challenge

AccorHotels said on Wednesday it had entered exclusive talks to buy concierge service provider John Paul, as it pushes further into new hospitality services and beefs up its response to the challenges of Airbnb.

Under the terms of the deal, AccorHotels – the world’s fifth-largest hotel group – will acquire 80 percent of John Paul for about US$150 million in equity and debt, with the company’s chief executive and founder David Amsellem keeping the remaining 20 percent, AccorHotels said in a statement.

“With John Paul we will be able to provide services to people who never came to AccorHotels,” AccorHotels Chief Executive Sebastien Bazin told a conference call.

John Paul offers concierge services managed online to some 3 million clients, mostly in the banking, car, travel and luxury sectors.

Bazin has long warned that revenue from traditional hoteliers is under threat from companies like Airbnb, which offer travelers accommodation options other than hotels, and from online booking websites like Expedia .

His response to the threat of the so-called sharing economy has been a flurry of recent acquisitions in the sector.

In February, AccorHotels bought a 30 percent stake in Oasis Collections, an American marketplace for private rentals, and a 49 percent stake in Squarebreak, a French start-up offering high-end rentals in France. In April, it bought British onefinestay, which specializes in renting out luxury private homes with hotel-style services.

Founded in Paris in 2007, John Paul merged with U.S. group LesConcierges in 2015, creating a group with a combined workforce of 1,000 people across North America, Europe, Africa, Asia and Pacific.

AccorHotels said John Paul’s enterprise value (EV) should be close to US$150 million, or a ratio of 11 times 2017 EV over estimated core earnings before interest, tax, depreciation and amortisation (EBITDA). The deal is expected to close late August/early September

John Paul had an estimated revenue of US$60 million in 2016 and an EBITDA margin of 15-20 percent. It eyes sales of US$80 million in 2017 and hopes to double sales to US$170 million in 2018, its CEO Amsellem said on a teleconference.

By 1048 GMT, AccorHotels shares were up 1.23 percent, slightly underperforming the CAC-40 index of French blue chips, which gained 1.53 percent. AccorHotels unveils its first-half earnings after market close on Wednesday.

Source : Channel NewsAsia – 27 Jul 2016

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