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Strategies and financial analysis of the Mercure hotel chain of the Accor Group

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The Accor Group is a global leader in hotel management and business services. Its headquarters are located in Evry, France, and employs around 172,700 people. The company has three business segments:hotel management, which is the main activity, business services and other services. Its hotel division has three different sectors: the luxury sector, with brands such as Sofitel and Novotel brands, the mid-range sector (Mercure,Sofitel, Suite) and finally, the budget hotels (Motel 6, Etap and Formule 1).

The division of business services is involved in designing, developing and delivering solutions in the field of employment and public benefits, "as well as retention and expenditure management,for corporate customers and public institutions.

Finally, Accor has a third sector, other services such as travel agencies, especially through Carlson Wagon travel in which Accor owns 50% interest, "as well as catering services, which operates 51 stores in 13 countries, such as Germany, Saudi Arabia,South Korea, the United States, Japan, Kuwait, Morocco, Qatar, United Arab Emirates, China, Thailand and Tunisia. In the domain of food services, Accor operates 17 gourmet restaurants in France, like Pre Catelan and Pavillon Elysee, along with cooking schools and culinary art shops.

Accor offers its services on trains (distributors, snack trolleys, on-board meals, sleeping cars), through its subsidiary companies which operate in 6 European countries (Austria, Belgium, France, Italy, the Netherlands and Portugal). Finally, Accor holds 34% investment in the group Lucien Barriere, a leading player among casinos.

The name "Accor" did not appear until 1983, as the company was originally called the SIEH hotel group in 1967 when it was founded by Paul Dubrule and Gerard Pelisson. The first commercial venture of the duo was the opening of the Novotel hotel in the northern part of France. SIEH entered the international market in 1973 with the opening of its first Novotel outside French territory in Warsaw in Poland, then gradually expanded to other countries like the Netherlands, Germany, the United Kingdom and the United States during the same decade.

By 1980, the SIEH operated nearly 240 hotels in over 22 countries. It was during the same year the company began diversifying its activities to include food services, through the acquisition of Jacques Borel International, a major player in the field, and Luncheon Vouchers in the UK. Now called Groupe Accor, the company expanded in Asia with the opening of new facilities in China and Thailand. In the late 80s, Accor reinvented and exploited the hotel market with its very own economical brand Formula 1 and the acquisition of the American Motel 6 chain in 1990, which brought an additional 550 hotels under the ownership of the Accor Group.

In 1993, Accor created the Coralia label to operate in the leisure hotel segment and commenced the renovation of its hotels Sofitel and Novotel. In 1997, with the goal of becoming the leading global player in its markets, Accor continued the growth of its business segments, signing partnerships with Air France, SNCF, Carlson Wagon Travel and American Express, which allowed the group to initiate a loyalty credit card program for its customers.

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